Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

The sum of €20 billion is just slightly less than the Department of Social Protection's budget, and is about two thirds of our annual tax take. The money was given to AIB on the proviso that it would bring about lending in the real economy. I have spent the greater part of my adult life working with SMEs, but AIB is not lending to SMEs. I have as many of them coming to me now as I had in practice. The reason AIB is not lending to SMEs is that while there is new lending, a lot of restructuring is converting overdrafts to term loans. The SMEs are not able to function in business because effectively they do not have an adequate supply of working capital.

My view was that AIB had a part to play. The bank has to restructure but I thought that we were all in this together and that it was not a case of AIB seeking to repair its balance sheet. The mortgage sector and restructuring have been referred to but I am talking specifically about the real economy. I am talking about SMEs that may employ two or three people. They are unable to expand, as they have been explaining to me. AIB was a very aggressive bank over the years and that was shown up particularly in the DIRT inquiry. The bank has ridden very much to the forefront. I would like to see AIB riding to the forefront in SME lending. Mr. Duffy has made points but the figures do not reflect what we are getting from punters on the ground. The Acting Chairman referred to the fact that we are dealing with local businesses.

If someone's overdraft is restructured into a term loan with no overdraft facility, it is like to asking them to drive with the handbrake on. The car cannot function. The SME sector is vital to this economy. AIB has €20 billion of taxpayers' money on loan, so there should be some reciprocity. AIB appears to be very risk adverse, which I understand given the necessity to repair the bank's balance sheet. However, can Mr. Duffy explain why only a quarter of the €3.5 billion annually is going to new lending?