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IRISH BANKS ARE understaffed, too risk-averse and ill-equipped to deal with the demands of the Small and Medium Enterprise sector, a Dail committee has been told.
The committee on jobs, enterprise and innovation heard from Mark Fielding of the Irish Small and Medium Enterprises association, who said that bank staff lack the expertise to make informed lending decisions for small businesses.
Citing the example of an ISME member who was seeking a lathe for metal working, Fielding said that the response from the banks relationship manager was:
‘We’re sorry, but we won’t be funding finance for your latte this year.’ That’s the type of experience we have.
He continued: “Even going into a bank now…you go up to your local branch in Carrick-on-Shannon and two of the tellers have been replaced with plants.”
Onerous demands
Fielding went on to detail cases of ISME members who had been refused loans under ‘unjustifiably hard’ conditions. They included:
He said that surveys of ISME members had shown that using the family home of a small businessperson as collateral has been brought into discussions to 15 per cent of occasions, and the bank has asked for the family home as collateral 11 per cent of the time.
“Yellow pack relationship managers”
Fielding said that staff facing SME owners in branches are not up to scratch.
“It’s not so much the ability of the SME but the calibre of the yellow pack relationship managers in banks, who between them can’t read a set of figures, are frightened by the word risk, and scared of making a lending decision.”
AJ Noonan of the Small Firms Association agreed, saying that “banks have credit departments where risk is feared.”
Challenge to bank figures
He challenged official figures from Bank of Ireland, AIB and Ulster Bank which claimed approval rates of between 80 and 90 per cent for SME loan applications.
ISME’s bankwatch survey of its members found that 54 per cent of SMEs who had applied for lending from banks in the 3 months ending in February were refused credit from their banks.
SFA chairman AJ Noonan said that 31 per cent of SFA members felt their relationship with their bank had disimproved, while 29 per cent reported an increase in the cost of working capital.
He said: “The great majority feel that the relationship is missing from the relationship manager title. They want someone…who responds effectively.”
Fielding also criticised the practice of what he termed “effective refusal” of loans, whereby banks turn down or advise against an application without officially processing it, thereby artificially deflating their refusal rate.
Noonan said that many loans are approved “on the basis that approval levels remain high, but there really is no danger of the funds ever being drawn down”.
The ‘long no’, when banks constantly return with more questions and criteria to borrowers was also criticised by members of Ibec giving evidence to the committee.
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Meanwhile life goes on at Fukushima.
Only a matter of time when we will rue the day of nuclear power
I think the people of Pripyat already do.
Someday they will learn to handle it properly and safely…
“Someday they will learn to handle it properly and safely” — but what will the consequences be,
when they learn that?
It’s no trick being safer than coal. But what if it becomes safer than natural gas to provide the same power? Safer than natural-gas-plus-wind-turbines? It’s already less radioactively polluting than those systems.
When that superior safety shall be fact, a government that wants to take a billion dollars in natural gas severance taxes and/or royalties and/or import duties will have to accept the loss of some citizens to gas disasters in the bargain. If it allows nuclear energy to be used instead, those lives will be saved, but the billion will, from a civil service point of view, be lost: it will remain in private hands.
No-one will forthrightly deplore that result. Everyone’s official position will be that however good a few million dollars in tax revenue may be, it doesn’t justify an innocent citizen’s death.
But perhaps there will come to be a huge industry of denying that nuclear energy is a lifesaver, and of calling nuclear wrecks that harm no-one “nuclear disasters”.
Perhaps, eh?
Perhaps when the media makes accuracy the priority over profits.. but the scary word “nuclear” sells very well. The headline “Radiation from Fukushima has not caused any health effect” may be true, but it won’t catch peoples attention or sell advertising. They definitely don’t want people to know that fear of Fukushima radiation caused much more harm than the radiation itself, then they might be held accountable…….
Not a single person was killed when the water hit the Fukushima nuclear plant, in fact I have not heard of anyone even cutting their finger there. In comparison around 18,000 people from the surrounding area were swept away never to be seen again. But here on the Journal Fukushima is remembered as a a nuclear disaster. In the press hysteria trumps fact every time.
The tsunami left the enormous death toll,19000, not the incident at the nuclear power plant. The wording of this item is rubbish.
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