Mr. Mark Fielding:

I will deal, first, with the issue of getting some consensus on the data.

We asked SMEs whether they were in the market for funding in the past three months. They either were or they were not - it was a "Yes" or "No" answer. We also inquired of those who were in the market, whether they applied. Again, the answer was a "Yes" or "No" answer. The final question we asked of those who applied related to whether they were successful. I cannot make it any clearer than that.
The response rate of 9.5% or whatever is actually very good when one considers it. We agree that there is a bias in our statistics. That bias has been present since 1993. The banks never queried the refusal rate right up to 2008, when it stood at something in the region of 20%. There was a bias in that regard as well because someone who had been refused was more likely to complete a questionnaire. The same bias exists at present. However, the fact that the refusal rate increased from 20% to 57% was not suddenly down to there being more SMEs. From that point of view, I would be extremely careful but, while admitting that there is a certain amount of bias, we will certainly stand over our figures. When the CSO compared the position for 2007 to that for 2011, it discovered that the figure dropped from 90% to 50%. In the context of the refusal rate, therefore, the answer the banks give depends on who is asking the question. I think the SEC frightened the living daylights out of them when it requested a breakdown in respect of the 90% figure. In that context, I quote from my submission, which states "AIB sanctioned 90% of formal credit applications (note: only formal applications captured)." AIB is actually stating here that it has not been counting.
For the past three or four years we have encouraged ISME members to make formal applications. Before I came here today, I received a phone call from one of our members who informed me - again, this would be fairly common - that his bank had refused to accept a formal application. He was told that he should put something down on paper and then informed not to do so. That is happening time and again. The person to whom I spoke represents a good number of businesses. The banks are increasingly refusing to accept formal applications because if they do, their figures will be shown up.
The Credit Review Office, CRO, overturns just over 50% of decisions in favour of SMEs. We would expect that to happen. One of the banks has been banging on about 30% of the businesses in respect of which decisions were overturned subsequently failing. I go with Mr. John Trethowan on this one, namely, that 70% of businesses were successful. There is always going to be some sort of attrition. This is not the playground; we are talking here about the business arena and there will be failures and successes. If the CRO had not stepped in, the failure rate would have been much higher because the businesses involved would not have obtained the money they required.
I agree with the Deputy that competition is required. However, I cannot see many foreign-owned banks arriving in Ireland in the near future. There may be some room in this regard for the establishment of a development fund or something of that nature.
The Deputy inquired as to whether there were more intimate relationships between business owner-managers and bank managers in the 1970s and 1980s. The answer in that regard is "Yes" but such relationships do not exist now. There was a flight of expertise out of the banks and the relevant staff were replaced with those I term "yellow packs", that is, people who just do not know either their business or their customers. I will not bore the committee by recounting a long story but I will provide an example. Those involved in precision engineering use lathes to cut metal. One of our members was brought before a branch manager and informed that the bank in question - I will not say where it is located - would "not be providing funding for the company's latte this year". That is a measure of the type of expertise that is currently available. The staff in question do not go beyond examining the figures. I am aware of instances where banks will not actually discuss matters with SMEs and are refusing - left, right and centre - to visit their premises in order to gain some knowledge of what their proposals involve. Perhaps there is a need to accept that the relationships which existed in the past were reminiscent of something from Pollyannaand that there is no way they could obtain in the current climate. However, one would expect a little more expertise to be available and more face to face engagement to occur. In one of the local bank branches in Carrick-on-Shannon, two of the tellers have been replaced by plants. There are difficulties and these have been caused by the fact that the banks have been deleveraging and cutting back on staff numbers.