Lorraine Higgins (Labour) | Oireachtas source

I raise an issue which has been raised by several colleagues, that is, the banking sector in Ireland. If the Irish banks are reluctant to reverse their current rule of thumb and associated trends of having a loan rejection rate second only to Greece in the eurozone of 24% of all loan applications to the SME sector, I ask the Minister of State to consider setting up a special working group in his Department to explore the possibility and feasibility of establishing a new bank or make efforts to encourage licence applications from banking institutions with similarities to that of the former ICC and ACC banks which targeted the very important sectors of Irish businesses as a way of generating significant economic growth.

We need proper banking competition in this country if we are to make any real achievements in the economy and we need to encourage new institutions to set up here. At present we have the same old banks with the same old legacies. Let us take some inspiration from what the UK has done where the Bank of England has recently granted a licence to a new bank called Metro Bank. This bank targets more than half of its lending to the SME sector and commercial enterprises. This is exactly the kind of statistic of which I would like to see Ireland boast next year.

The crux of the problem is that all the banks currently operating in the market are retail banks. There is no properly focused business bank and it is high time for one to enter the market and the Government needs to make efforts to allow this to happen. We need to ensure banks are financing cash-flow businesses. We also need to ensure that officials get the proper training vis-à-visconsideration of business plans so that viable business plans are approved for finance and not let slip through the net. We are missing the opportunity to finance Irish businesses and entrepreneurs. If we do not correct this trend and take remedial action, we will face paralysis. We owe it to the country to avoid this.

Without a proper functioning banking system we will not be able to rebuild Ireland. We must recognise how critical SMEs are for economic development and we must do everything to address the conditions which have been inflicted upon them in recent times. Therefore I urge the Minister of State to earnestly consider the proposals my colleagues and I have made with regard to the banking sector.