Report on SME Credit Demand

The Department of Finance has published a third Report on the Demand for Credit by SMEs here. The report covers the period April to September 2012. The main findings are that

 39% of SMEs sought bank finance in the report period, a one percentage point increase from the report half a year ago

 56% of formal finance applications were approved fully and 4% partially; 19% were declined, and 21% remained pending

Almost half of all SMEs believe that banks do currently not lend to SMEs in Ireland

–  7% of SMEs have not applied for credit because of this

 The view that banks do not lend is mainly based on media reports and the experience of business peers, not on own personal experience.

6 replies on “Report on SME Credit Demand”

Cleary, these SME’s need to get their finger out and apply for more. The money will positively flow.

Meanwhile, I see that buy to let’ers are making those arrears figures look bad. Some seem to think that if they go into arrears, they just have to wait around for some debt forgiveness coming their way. Er, not according to any banker I’ve been talking to recently. They hope to call the bottom of the market in about one year, repossess then and make a few bob by selling into a rising market and hounding the borrowers for the balance for the rest of their natural….

Are the banks still using SMEs overdraft renewals, loan recycling and loan extensions to pretend new lending is happening?

Maybe they need a few 10s of Billions more Euros to make them actually do real new lending…

Sure, what could go wrong?

(Here’s hoping they don’t siphon it all off to their pensions!)

@What goes up

“Are the banks still using SMEs overdraft renewals, loan recycling and loan extensions to pretend new lending is happening?”


It will be interesting to see if they change the classification of what can be regarded as an SME loan soon. Watch that space.

Donal O Mahony is back in the IT .

Sir, – Jennifer O’Connell’s take on this nation’s addiction to “failure porn” (Life, November 28th) invites numerous corroborations.

It is such addiction, for example, that ensures a stunning 88 per cent return in Irish government bonds since July, 2011 has gone largely unheeded by the Irish media, politicians and, most disturbingly, an insolvent Irish pensions fund industry . . . unheeded by all, perhaps, except those clear-headed international investors who see the improving creditworthiness that we ourselves discredit. – Yours, etc,


Dublin Road,

Shankill, Co Dublin

Very comprehensive report and it gives a good picture of the amount of bank loans that are getting the green light.

On a deeper level I’d note the following.

Why can’t SMEs survive with existing money passing between them? Why do they need credit to survive.

The answer to both these questions is that the existing money supply is constantly being deleted through loan repayments and new credit is required to prop up the money supply again.

The second important point is that when banks issue credit they create the principal of the loan and what’s in circulation today is the principal, or partial principal, of each loan. What’s owed back is the principal plus interest. Bank credit creates less money than is does debt and this is one reason why banks have to deal with so many defaults.

Of course, money doesn’t have to originate through bank loans…

One has to wonder about some of these surveys.
Page 33 of the SME credit demand survey itself show deteriorating collection days for debts, but the same firms show themselves paying suppliers at a better rate of deterioration, if one could say it that way.
Surely they should be similar in movement.

@DOF / Red C

RED C :Your job no 47412.
Shouldn’t the Net increase / Decrease read minus 22 not 22, on the third slide of the presentation.

Comments are closed.