Budget 2015 Submission calls on Government to send clear signal of support to Irish SMEs

 

  • Bibby Financial Services Ireland (BFSI) urges Government to help SMEs access alternative sources of funding
  • Government’s new ‘SME bank’ must ring-fence funding for alternative providers
  • Remit of Credit Review Office should be expanded to advise SMEs on wider funding options

The government must introduce measures to make it easier for SMEs to access alternative sources of funding, according to Bibby Financial Services Ireland, the world’s largest independent invoice finance company which provides €1billion funding to over 7,000 SMEs globally.

The call comes as BFSI published its pre-Budget 2015 Submission today (DATE). The Submission includes a number of key proposals which, if introduced by the Government, would help Irish SMEs access credit to fund and grow their businesses in the years ahead.

The Submission calls on the Government to ring-fence a substantial proportion of the €500 million in funding available from the State’s new ‘SME bank’, the Strategic Banking Corporation of Ireland (SBCI), for alternative funding providers. These providers would then be required to distribute this funding to Irish SMEs. The SBCI’s €500 million fund is derived from funding by Germany’s KfW Bank, the European Investment Bank (EIB) and the National Pension Reserve Fund. BFSI has warned that without such ring-fencing that there is a risk the €500 million fund, will be allocated solely to Ireland’s pillar banks without any guarantees that these institutions will then pass this funding on to SMEs.

Commenting on the proposal, Ronan Horgan, Managing Director of BFSI said:

‘SBCI’s funding has been long awaited by SMEs, not least by those who have experienced real difficulty in accessing credit from traditional main street banks. There has been much commentary on the need for the Government to actively promote alternative sources of funding for SMEs. Ring-fencing a proportion of the SBCI’s funding for this purpose would send the clearest signal yet that the Government is serious about promoting this sector’.

Other key recommendations include:

  • Expanding the remit of the existing Credit Review Office to enable it to give SMEs, who have been refused credit by the pillar banks, impartial information on alternative funding providers;
  • To expand the Banking Division withinEnterprise Ireland to actively promote and advise SMEs on alternative funding providers now that the Local Enterprise Offices are established.

Horgan also noted: 

’We urge the Minister for Finance and wider Government to take on-board the proposals contained in today’s Submission. The problems faced by SMEs in accessing credit has been well documented. Our proposals offer practical and implementable solutions to overcoming the obstacles which our SMEs can encounter.

‘The ERSI recently commented that SMEs are too reliant on Bank funding products. SMEs must be top of the queue to benefit from the funding at the disposal of the State new ‘SME bank’. This must be a number one priority for Government. Allowing alternative funding providers to play a role in this process is key to ensuring SMEs have a wider range of sources when seeking funding.

‘Equally, greater information for SMEs on how to access such alternative sources is also important.

‘An independent panel of financial advisors, to promote alternative forms of financing, available to SMEs through the various accountancy representative associations, would go along way.

‘The Credit Review Office, Enterprise Ireland and Accountancy associations like the CPA are well-positioned to bridge existing information deficits, provided the willingness to empower them to do so exists,’ added Horgan.

ENDS

For further information contact:

Sarah Regan  01 637 1777 / 086 896 3312        

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