James Reilly (Fine Gael) | Oireachtas source

Some of the questions I wanted to ask have been asked so I will not repeat them. First, welcome to you all and thank you for your presentations. I am sorry I missed the beginning of Mr. O' Regan's presentation but I have his document here. Banking is critical to our economy, critical to SMEs and critical to many of us in many walks of life. However there are concerns about the cost of doing business in this country, and banking and the cost of finance is one of the major ones for most people in business. I hope, with the Chair's agreement, that the witnesses would be open to coming back again to give us their view on what they see as the cost of doing business outside of their own direct remit. I would like to hear what they have learned from their customers and the tremendous resource they have in that regard. On the second page of Mr. O' Regan's document he states that access to finance is not a significant challenge for most Irish SMEs. I wonder if we put the words "affordable finance" in there, how that would then read. The document also states that Irish SMEs face a number of important challenges and access to finance is not prominent among them but I will come back to that.

The Central Bank issued a report earlier today and some things jump out. One is that SME loan rejection rates in Ireland have increased to 13.9% in September 2017 from 8.2% in March 2017. Clearly those looking for loans are still having huge difficultly in getting them. Interest rates - and this has been touched on by Senator Humphreys - for non-financial corporate loans, below €0.25 million stood at 5% in July 2017, that is higher than in comparator countries, while the interest rate gap between loans below €0.25 million and loans above €1 million stood at 2.9% in Ireland, which is also above comparator countries. Issuance of new loans up to €1 million expressed as a proportion of domestic demand was 2.1% in Ireland, as of quarter 2, 2017. This ratio is considerably lower than EA2 comparator countries. This would seem to indicate that access to credit for many SMEs in this country is a problem and that its affordability is yet another problem.

I wanted to make a few comments on some of the presentations. AIB has already outlined how many branches have been closed. I am very interested in its move to join forces with An Post to deliver services locally. How will this work in terms of lodgments, loans, charges for services etc.? I welcome the 21 Brexit advisers, but again I would like to raise one other issue. We talked about Germany, in particular, and we spoke about European rates. We can talk about Germany being a huge economy but there are many other smaller economies than ours in Europe.

Their rates are not as high as ours. The explanations given do not necessarily stand up to scrutiny but we can return to that, and I would be glad of the witnesses' comments on it. I do not have the figures for the smaller economies such as Luxembourg and Malta. An issue that concerns me is the cost of overdrafts. Many business loans run as overdrafts rather than loans and the charges here can be up to 15%. These loans would be charged at around 3% in Germany. That is a hell of a differential. I will not go into the other areas because I am the last speaker and other people are waiting outside. We are ten minutes over our time, but I would like a response to that. There is a long way to go to further explain why our rates are higher than in other countries and why the increase in rejection rate to SMEs went up in the six-month period between March and September of last year.