Claire Kerrane (Roscommon-Galway, Sinn Fein)
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185. To ask the Minister for Finance the reason financial institutions are refusing credit to self-employed persons as per changes to the Credit Register; when these rules changed; the way they were changed; the lookback period for credit now used; what this means for small businesses trying to access finance where they ran into difficulty during the economic recession through no fault of their own but restored their business, paid off loans and have no such loans outstanding today and yet, cannot access credit; and if he will make a statement on the matter. [29178/24]

Jack Chambers (Dublin West, Fianna Fail)
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The Central Credit Register (CCR) is established by the Central Bank under the Credit Reporting Act 2013. The Act provides that lenders must submit personal and credit information to the CCR on all loans for €500 or more, and make an enquiry on the CCR when considering a loan application for €2,000 or more.

Credit information submitted by lenders in respect of new loan applications is held on the CCR for a period of 6 months from the date on which the information is entered on the register and credit information submitted by lenders in respect of loan agreements is held on the register for a maximum period of 5 years at any given time. Where all liabilities under the loan agreement have been discharged, the credit information is held on the register for a period 5 years after the loan is discharged.

It should be noted that the information from the CCR forms part of the range of information available to lenders when making credit decisions. However, it does not provide guidance, or contain a recommendation or outline a prohibition for lenders on the decision they should make on a particular application for credit. Subject to complying with applicable law and regulatory requirements, it is a matter for lenders to make their own lending decisions in accordance with their own credit policies and risk appetites.

It is important that SMEs have appropriate access to credit any my Department monitors this area of credit activity. Since 2011 my Department has published the SME Credit Demand Survey which is the most comprehensive survey of its kind, covering over 1,500 respondents through in-depth discussions and capturing a full picture of the SME landscape in Ireland, with micro, small and medium-sized enterprises accurately represented as per the percentage make-up of SMEs in Ireland.

Regarding the demand for credit, the latest Survey published on 25 April 2024 shows that of the SMEs surveyed, 18% applied for bank credit in 2023, broadly unchanged over recent years. The majority of those not applying stating they had sufficient internal funds (76%). Over the last decade, the share of SMEs applying for bank finance has fallen by around half, from 35% to 18%.

In relation to those businesses refused credit, the Credit Review Office (CRO) was established in 2010 to ensure viable SME and Farm businesses have access to credit from Irish banks (AIB, BOI, PTSB). It provides an independent appeals process, reviewing credit and loan applications of up to €3m refused by the banks.

Appeals can review new credit applications, existing facilities that have been reduced or withdrawn and requests to restructure a credit facility. The CRO also operates an informal “Help Line” service where the Reviewers engage directly with SMEs/farmers who have credit/banking related issues providing information and updates.

From its inception in April 2010 to end December 2023, the CRO has received 1,368 applications, with 970 reaching a final conclusion. The CRO upheld the appeals of 60% of those businesses and farms that completed a review through them resulting in the banks providing credit of €82.4m to SMEs and Farms.

A further 46 applications seeking €7m were withdrawn during the appeal process and approved by the banks. Where credit applications cannot be supported at the time of the appeal, the outcome of the review will generally include a suggested roadmap to make future bank applications more likely to succeed.