Lucinda Creighton (Dublin South East, Fine Gael)

I am pleased to have the opportunity to raise this very important matter on the Adjournment. It is well known in the House that there has been a particular problem with credit flow to small and medium-sized enterprises since the beginning of the recession over two years ago. This problem has become more acute with time. In light of the deal concluded over the weekend with our partners in the European Union and with the IMF, the options for this country for stimulating growth have been very much reduced. Our hands are tied, as many speakers have pointed out, with the tying up of the National Pensions Reserve Fund in the deal and with the restrictions imposed on our State assets.

It is, therefore, more pressing that we enable our enterprise sector to grow. If we are to achieve the ambitious growth targets for the next four years, as set out in the four-year strategy, we must see that growth driven by the enterprise economy. I hope my raising of this matter will be regarded as constructive.

Credit flow is a significant problem. The establishment of the Credit Review Office was designed to assist with credit flow. According to the Minister for Finance, the CRO was established with the intention of encouraging and increasing the supply of credit to viable borrowers for business purposes. We all know viable businesses that are not benefiting from credit; unfortunately, the CRO has not made that situation any better. The office, as we knew from the very outset, does not have any powers to force banks to overturn decisions. It is an appeals mechanism for business owners who are refused credit, but it has no powers of enforcement. The Minister for Finance said on 21 September that only 20 loan applications had been sent to the CRO for review. Of these, ten have been dealt with and only five appeals were upheld. It is clear that this mechanism is simply not functioning. I believe that what Deputies have been saying in the House for the past 18 months is accurate because I deal with businesses in my own constituency on a regular basis.

In the second quarterly report of 18 November, 19 applications were analysed. Of these, the banks' decisions were upheld in 12 cases, while in five cases the CRO sided with the borrower. The remainder needed more work. Thus, five SMEs have accessed credit as a result of the CRO, which was set up last April. The chief executive officer of the CRO, John Trethowan, indicated on 18 November that many more cases had been resolved through phone calls and face-to-face meetings, but we have no evidence of this as there is no paper trail. From discussions with owners of SMEs in my constituency, I find it hard to believe. More recently, ISME surveyed SMEs and found that 68% of companies still did not know the service existed.

This year, €3 billion was to be made available to SMEs by Bank of Ireland and AIB, but when I questioned the Minister about this I was informed that he could not tell me, as a Member of the House, how much of this has been actually drawn down as the information was commercially sensitive. I am sorry, but I simply do not buy that. We are aware that Bank of Ireland, AIB and other banking institutions in the State have been entirely dishonest with us, with these Houses, with the Government and with the Department of Finance, but now the Department of Finance is trying to cover up for them, which is unfortunate.

There is an urgent need to secure credit for companies if the enterprise sector is to thrive. At the beginning of this recession, almost 1 million people were employed in SMEs in this country, but this figure is declining rapidly. We must inject some life into the SME and enterprise sector. If all of our targets in the four year plan and our aim of achieving a budget deficit of 3% of GDP by 2015 are to be met, and if we are to service the massive, crippling loans we have now inherited from this Government, we must stimulate growth in the economy. As far as I can see, our options are limited, and I hope the Minister of State has some constructive suggestions on how to address this major problem.

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