Eurostat Report an indictment of Government’s lack of support of small Irish businesses

Posted on Thursday, 6 October 2011

Social Justice Ireland is disappointed but not surprised at the results from latest Eurostat Report which has found Irish SMEs are among the least successful in the EU in accessing credit.

The economic crisis has made it more difficult for small and medium-sized enterprises to access banking credit. The proportion of unsuccessful loan applications rose between 2007 and 2010 in 19 of the 20 Member States for which data are available. The largest increases in unsuccessful loan applications were observed in Bulgaria (from 3% in 2007 to 36% in 2010), Ireland (from 1% to 27%) and Latvia (from 4% to 26%). Unsuccessful applications fell only in Sweden (from 9% to 6%).

These figures were issued by Eurostat and are based on a survey covering 25,000 businesses across the EU. The data was released in connection with European SME week 2011, which takes place from 3 to 9 October in 37 European countries, including Ireland.
Social Justice Ireland has been advocating for an effective way of ensuring credit is made available for small businesses since the current crisis began. Social Justice Ireland proposes that the most efficient and effective means for Government to do this would be to buy back the ICC Bank it sold to Bank of Scotland (Ireland) some years ago which has a state-wide infrastructure. 

This was a bank focused specifically on providing credit to small businesses and it has a long track record of doing this successfully. Buying it back, which would cost the government a very small percentage of what it is spending on NAMA and on repaying bank debt, would provide Government with the required mechanism to address the credit problem being experience by small and medium businesses. If it were not possible to buy back the ICC Bank then a new institution should be created to take the same approach as ICC and this would go a long way to resolving the problems being faced by small and medium enterprises.

For full details of the Eurostat report click here.