CSO Access to Finance Survey

Here‘s a new and extremely useful survey released by the CSO on access to finance. The survey focuses on SMEs. Specifically:

The scope of the survey was enterprises in the non-financial market sectors … that employed between 10 and 249 persons in the year 2005 and which continued to employ at least 10 persons at the time of the survey (September 2010).

There’s a lot of information in it but the key point is the following:

Enterprises that applied for loan finance had a success rate of 90% in 2007, compared with 50% in 2010. Enterprises applying to banks for loan finance were successful in 95% of cases in 2007, while in 2010 the success rate dropped to 55%.

This survey is part of an EU-wide initiative so we can find comparisons for the figures. See page 11 of this document. The rejection rates in Ireland seem to be far higher than in other EU countries. (In doing these comparisons, note that in the reporting of the Irish survey results “The success rates in this table reflect the share of enterpises that were fully or partially successful in obtaining finance.”)

This seems to pretty definitively disprove the “weak demand” explanation for falling credit.