Mr. John Trethowan:

There are many points to cover but I will do my best to cover them. The Credit Review Office deals solely with credit, not banking services, but I can comment on access to credit through the bank networks. One of my key concerns is that we are down to three active banks which are making loans to SMEs in the market.

Some of those are now contracting their physical presence also.

The traditional model of relationship banking has gone, which is much regretted by the business sector. I chaired a focus group at an SME event for Europe in Croke Park two weeks ago, after which I wrote to Mr. Pat Farrell and the three bank CEOs to give them feedback. That is where I picked up the direct sense of remoteness from the banks.

Senator Feargal Quinn speaks as a bank customer. It would be great if some of the bank directors and executives began to listen to what their customers are saying. They do feel remote. I got the sense that neither the banker nor the customer is enjoying the experience of interfacing about credit decisions. I have written to the three banks and to Mr. Farrell to let them have that feedback.

I agree with what Mr. Farrell says about risk appetite. A reasonably well-run and well-capitalised business that puts a good case to the bank will have a loan sanctioned. In the reports we get from the banks, the monthly sanction levels are very high on the formal applications they deal with. However - and this is where the Credit Review Office comes into play - on a risk continuum from no risk at 0% to total loss at 100%, customers in the first 60% are being serviced by their banks. They may have a clunky interface and a long process but they are getting their money. The Credit Review Office has been active in the area between 60% and 85% risk, where the loans are more challenging and do not fall within current bank lending policies. Even where we can show that cash is being generated to repay debts, if they do not tick the boxes on current solvency, gearing - which is the stake of the borrower - and security, the loans are being declined. It is in such cases, in 55% of the loans we see, that we are managing to recommend that the banks make the loans. We are not asking banks to lend money that will not be repaid. Enough of that has happened already. There is, however, an over-rigorous application of lending policy in some cases.

Following the forum held in Croke Park two weeks ago, we are getting more and more reports of systemic serial requests for information when a loan is being made, which stretches out the period of the loan. The code of practice for SME lending and section 2(10) of the Act that set up the review office suggest a time limit of 15 working days for making credit available. These serial requests are stopping and starting the clock the whole time. In one of the meetings with SMEs I attended up the country I heard this described as "the slow no". I have written again to the banks to point out that these systemic information requests are irritating borrowers.

The good work done by Mr. Farrell and Mr. O'Regan with the chartered accountants to embed the common application form, the common business plan format and the common cashflow analysis will be helpful. We need to take this forward now and work with the accountancy bodies and the county enterprise boards to ensure they understand that this is out there and how to use it. We hope to help improve the capacity of businesses to borrow by getting this embedded more widely in the community. It is still a work in progress.

The Central Bank figures on demand are taken from a wide European survey with a relatively small number of SMEs. The Credit Review Office asked that we survey the demand in the Irish market among SMEs. That was previously done by Mazars; it is now being done by RedC.