Ireland has the second lowest approval level for small business loan applications in the euro zone, according to new research by the Central Bank.
The research is likely to reopen the debate as to whether the Ireland’s bailed out banks are open for lending to business.
This report, titled ”Irish SME Credit Supply and Demand, Comparisons Across Surveys and Countries” comes from two economists at the Central Bank.
This means that the views expressed could not be more official.
The research said that the country’s small and medium enterprise firms are twice as likely to have a business loan application compared to the euro zone average for loan refusals.
The report says that high rejection rates in Ireland can not be explained by the quality of the pool of potential borrowers.
More than 25% of loan and overdraft applications from small business were rejected in recent months. That compares to one in 28 in Germany.
The report also finds that Ireland has the euro zone’s second highest rate of discouraged business borrowers.
The Irish Bankers Federation said the report flies in the face recent wisdom. Earlier this month AIB said it was exceeding its lending targets to small business.
The small and medium enterprises lobby, ISME, has said the report confirms its worst fears.