Brendan Howlin (Wexford, Labour)
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Question 100: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if, in the case of a person (details supplied) in County Wexford, the owner of two fishing trawlers who has been refused funding by their bank, her attention has been drawn to the fact that without a bank loan to fund the survey which is required to obtain a certificate of compliance in order that their fishing licence can be renewed in October 2009, the only option will be to attempt to sell one vessel in the currently depressed market, with consequent loss of four jobs; if she will offer assistance or advice which would resolve this person's dilemma in order that jobs could be retained; and if she will make a statement on the matter. [24445/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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The Government's efforts over recent months in addressing the banking sector have had a central focus on the needs of the wider economy including the enterprise sector. A proper functioning banking sector is central to our economic recovery, as this will facilitate appropriate lending to our entrepreneurs, especially to SMEs.

There are instances being reported of viable businesses being refused credit and some representative bodies are suggesting such refusals are in the majority. As against this, banks reporting refusals are slight and that falling demand for credit accounts for reduced lending levels. There is a perception that there is limited credit availability and this can be damaging at a time of fragile business and consumer confidence.

As part of the banks' recapitalisation package, the Government decided to have an independent review of bank lending to try to have an objective assessment of the current lending situation. This process is under way and although originally only the two recapitalised banks agreed to participate and fund the review, now all the six leading banks are engaged in the project. The results of this review will be available at the end of this month and this should allow all stakeholders have an objective view of the state of lending.

The recapitalisation package also included many supports for enterprises and SMEs in particular. Tthe recapitalised banks have committed to increasing their lending capacity to SMEs by 10% over 2008. Irish SMEs are covered by the Code of Conduct on Business Lending to SMEs. This code was published by the Financial Regulator and came into effect from 13 March 2009. Lenders covered by the code are required to offer their customers an option for an annual review meeting, to include all credit facilities and security, including collateral. Banks are also required to treat all credit applications on their merits, to inform customers of the basis for decisions made and to have written procedures for the proper handling of complaints. Where a customer gets into difficulty the banks will seek to agree an approach to resolve problems and provide reasonable time and appropriate advice. Entrepreneurs applying for bank facilities, therefore, have a direct means to enquire from their banks why lending decisions are being made and to challenge any unreasonable terms being applied through the formal complaints procedure. Responsibility for the operation of the code rests with the Financial Regulator. Three banks are providing funding for SMEs on foot of €300 million facilities provided by the European Investment Bank to assist developing SMEs. A €100 million environmental and clean energy innovation fund is also being established by each bank as well as a further €15m each to new or existing seed capital funds.

The Minister for Finance and I have also established a Credit Supply Clearing Group with bank, business (including ISME and SFA) and State representation. This group is responsible for identifying patterns of events where the flow of credit to viable businesses appears to be blocked and for seeking to identify credit supply solutions relating to these patterns. The group is however, not an appeals mechanism for cases where credit has been refused by the banks. Individual business decisions remain the responsibility of the banks.

The group met for the first time on 28 May 2009 and will next meet following the conclusion of the Independent Review of Bank Credit.

Government has now introduced formal arrangements to reduce the payment period by central Government Departments to their business suppliers from 30 to 15 calendar days. This commitment has effect on all valid invoices received on and from 15 June 2009 and should help ease cash flow difficulties for SMEs. Individuals who have difficulty in getting access to bank credit should approach their banks to ascertain the reason for such refusals and should consider to what extent the relevant bank is operating within the Code of Conduct on Business Lending to SMEs. If the Deputy is aware of any pattern of events within the fishing sector where the flow of credit to viable business appears to be blocked, information on these patterns can be sent to the Credit Supply Clearing Group care of my Department.