Banks are not responding to increased demand for finance from small and medium enterprises, according to the latest ISME quarterly bank watch survey.
ISME says the number of firms looking for finance in the last three months has increased to 37% from 25% the same time last year.
But banks are still turning down one in every two applications, according to the survey. ISME said it was a “slight” improvement from the 52% refused finance in its previous survey.
Nine out of 10 firms surveyed said the banks are making it more difficult to access finance. Out of the 50% approved for funding, 66% have drawn down the finance either fully or in part. This is an increase from the 57% in the final quarter of 2011.
The survey was conducted in the week ending March 9 and attracted 904 responses – a response rate of 22%.
ISME chief executive Mark Fielding said the findings confirm the evidence of the recently published Central Bank report and the EU Survey on access to finance in the euro area, which said Irish SMEs were second least successful – after Greece – in obtaining bank finance.