Brian Hayes (Dublin South West, Fine Gael)

As indicated to the Deputy in a written reply yesterday, the Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks were required to sanction lending of at least €3 billion in 2011, €3.5 billion this year and €4 billion in 2013 for new or increased credit facilities to SMEs. These followed on the initiatives taken by the previous Minister for Finance who set up lending targets for the recapitalised banks.

I can confirm to the Deputy that both banks have reported to the Minister for Finance that they have achieved their targets for 2011. This information is currently being independently assessed by the Credit Review Office and will be dealt with in the report for the end of November 2011 which is due to be published shortly.

I accept that the amounts sanctioned by the banks are but one measure of the provision of credit. However, these amounts are within the control of the banks and are therefore an appropriate target for the banks. The targets are kept under constant review in the context of levels of economic activity.

Data are available from the Central Bank website on the actual drawdown of credit. This indicates that gross new lending to non-financial SMEs by credit institutions in Ireland was €2.3 billion for the first nine months of 2011. Figures are not yet available for quarter four of last year. Drawdown is also monitored by my officials and the Credit Review Office and are reported to the EMC.

Gross new lending details the amount of new credit facilities drawn down during the quarter by SME counterparties, that is, where this credit facility was not part of the outstanding amount of credit advanced at the end of the previous quarter. Gross new lending is defined in such a way as to exclude renegotiation or restructuring of existing loans. Gross new lending does not equate to loans sanctioned over the period.

Additional information not given on the floor of the House.

The recent independent Mazars survey of SME credit found that 17% of respondents whose requests for credit were approved did not, either wholly or in part, avail of the facilities. A higher proportion of new credit facilities had not been drawn down in comparison to renewed facilities. The most frequent reasons cited for not availing of approved credit continue to be "not needed at present time", which was cited by 80% of respondents. Given that the decision to draw down approved credit rests in the hands of the borrower, it would not be appropriate at this stage to impose targets for actual draw down on the banks. It remains an important factor to monitor.

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