Bernard Durkan (Kildare North, Fine Gael)
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344. To ask the Minister for Finance the extent to which each of the main banks have facilitated the borrowing requirements of the construction sector in the past 12 months; if each is performing adequately in this regard; and if he will make a statement on the matter. [1966/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, small and medium sized businesses, including those in the construction sector, play a central role in the sustainable recovery of the Irish economy.  Government policy is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.

The Deputy will also be aware that in my role as Minister for Finance I have no direct function in the relationship between the banks and their customers. I have no statutory function in relation to the banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution. This includes decisions in relation to products as determined by the banks.

All viable businesses operating in Ireland should have the opportunity to access sufficient finance to meet their enterprise needs in a manner that supports growth and employment in the economy.  As the Deputy will be aware, Chapter 7 (Finance for Growth) of the Action Plan for Jobs 2016 (APJ) set out a range of commitments to ensure viable SME's can access appropriate finance at a reasonable cost from both bank and non-bank sources. Finance for Growth will again feature in the Action Plan for Jobs 2017 and a number of actions have been proposed by my Department for inclusion in relation to this.

In line with Action 144 of the APJ 2016, officials from my Department collated and examined data from AIB and Bank of Ireland on a monthly basis, including data pertaining to the various sectors. Furthermore, my officials meet the banks on a quarterly basis to ensure an informed understanding of the wider SME bank lending environment which assists the development and implementation of policies aimed at ensuring SME access to finance and increased competition in the SME lending sector.

Regarding the borrowing requirements of the construction sector, data published by the Central Bank of Ireland shows that new lending to the construction sector for Q1 to Q3 2016 totalled €95 million a growth of €16 million when compared to the same period in 2015.  This data can be found in Table A.14.1 Credit Advanced to Irish Resident Small and Medium Sized Enterprises published on the Central Bank's website. 

It should also be noted that the results of the most recent Department of Finance SME Credit Demand Survey, covering the period April to September 2016, show that when pending applications are excluded, 84% of credit applications to banks were approved or partially approved.  Demand for credit remains subdued and the latest survey shows only 39% of SMEs in the construction sector requested bank finance in the previous six months a decrease of 9% from September 2015. Furthermore the main reason for not applying for bank finance is that SMEs do not need it or already have it in place (86%). Further results from the survey can be found at .

The Government remains committed to the SME sector, as reflected in the Programme for a Partnership Government, and sees it as a key engine of ongoing economic growth.  Consequently, my Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit on both a macro and sectoral basis in order to ensure that sufficient access to finance is available to facilitate indigenous viable SMEs, including those in the construction sector, to reach their full potential in terms of growth and employment generation.