Billy Kelleher (Cork North Central, Fianna Fail)

I am aware of various surveys carried out by ISME. The results of individual surveys from the enterprise and banking sectors can be useful in highlighting the generality of the credit supply issue but they must all be examined in the context in which they are carried out and the methodologies applied.

The banks' recapitalisation package was about securing the long-term health of the economy and about enabling our banks to get back to the business of lending to viable projects and about saving jobs. The package includes many supports for small and medium enterprises, SMEs. The recapitalised banks have committed to increasing their lending capacity to SMEs by 10% over 2008. This should ensure that sound businesses will receive support from their banks. A €100 million environmental and clean energy innovation fund is also being established by each bank as well as a further €15 million each to new or existing seed capital funds. Much of this funding will flow to small and medium enterprises. SMEs are also covered by the code of conduct on business lending to SMEs. This code which was published by the Financial Regulator came into effect from 13 March 2009. The application of the code will promote fairness and transparency in the treatment of SMEs by the banks and should facilitate access to credit for sustainable and productive business propositions. Allied Irish Bank, Bank of Ireland and Ulster Bank will also provide funding for SMEs on foot of €300 million facilities provided by the European Investment Bank to assist developing SMEs.

The recapitalised banks agreed to pay for and co-operate with the carrying out of an independent review of bank lending to SMEs. Additional banks have now participated in this review with the result that the five major lending banks are now included. The purpose of the review is to ascertain the position on credit availability to SMEs here and to recommend appropriate action to improve credit availability. The independent review has now been submitted to my colleague, the Minister for Finance, and will be published shortly. I welcome the completion of this review as it should allow all stakeholders an objective view of the state of lending from the banks to SMEs and provide some clarity on the level of credit being declined.

Arising from the recapitalisation package, the Tánaiste, along with my colleague the Minister for Finance, also established a credit supply clearing group with bank, business (including ISME and SFA) and State representation.

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