News Column

ISME Welcomes Decision to Provide Low-Interest Loans to SMEs

May 22, 2014

DUBLIN, May 22 -- The Irish Small and Medium Enterprises Association issued the following news release:

ISME, the Irish Small and Medium Enterprises Association, welcomed the government announcement today (22nd May) on its plans to establish the Strategic Banking Corporation of Ireland (SBCI) specifically for SMEs, for which the Association has been lobbying since the bank crash of 2010.

ISME CEO, Mark Fielding, commented, "While we welcome this long awaited initiative, the fear among credit squeezed SMEs, is that the bailed out banks will revert to form and divert these loan funds to "safer" large businesses. Our banks have 'form' in this area and previous European low-interest loans found their way to less risky larger businesses, making a killing for the banks, while starving SMEs of much needed finance."

ISME recommends that monthly returns on loans made be returned separately to the central bank, showingthe type, duration and interest rate on each loan made from SBCI funds as well as recipients by sector. This will assist in monitoring the loan books and hopefully stop rescued, risk-averse banks dealing only with 'no risk' lending.

"Government must ensure that the legislation for the SBCI clearly stipulates that all funds provided must be loaned to SMEs only. Provisions to monitor this and to penalise non-compliers must also be included. This initiative could potentially be of great benefit to job and wealth creating Irish SMEs but only if the Government ensures that the bailed out banks play their part," concluded Fielding.

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Source: Targeted News Service

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