Olivia Mitchell (Dublin South, Fine Gael)
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Question 64: To ask the Minister for Finance if his attention has been drawn to reports that the two pillar banks are approving loans but later imposing conditions so strict and so unreasonable as to prevent drawdown; if he will clarify if banks' claims of compliance with the €3 billion target is based on loans approved or on those actually drawn down. [13272/12]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, 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. I can confirm to the Deputy that both banks have achieved their 2011 targets.

I should stress that the targets are for approvals of credit, targets have not been imposed for drawdowns. I would point out that the drawdown of funding is at the discretion of the borrower. There are many factors affecting whether or not funding is drawn down, such as changes in market conditions or company restructuring. The recent Mazars Survey of SME Lending, conducted on behalf of my Department, found that the most frequently cited reason for not availing of approved credit was 'not needed at present time'.

In terms of the banks imposing strict conditions on loans, if a borrower believes that a bank has attached terms and conditions to a loan such that the loan cannot be accepted, all borrowers have the right to appeal through the bank's internal loan appeals process and this is the first step that should be taken. If the appeal to the bank is unsuccessful, the Credit Review Office (CRO) will review that decision and make an independent recommendation on the refusal. It is worth noting that, of the appeals made to the office, in approximately half of cases the CRO has recommended that the credit should in fact be granted and I would encourage SMEs that feel they have been unfairly treated to use the services of the CRO.