Commenting on the results of the report on the demand for credit by Small and Medium Enterprises (SMEs) published by the Department of Finance, IFA Farm Business Chairman James Kane said the report shows an unacceptable delay by the banks in making credit decisions.
Mr Kane said, “Government and the Central Bank must ensure that the delays in assessing credit applications are eliminated as farm businesses need a swift response to support both the day-to-day running and longer-term planning of their enterprises.”
He continued, “The report shows that the business environment for small businesses, including farm businesses, remains difficult, with weak demand for credit overall, and a high level of loan refusal. However, the agriculture sector is in a stronger position than other SME sectors with over 60% of farm businesses surveyed reporting that their turnover had remained stable or increased in the six months to October 2011.”
James Kane said, “The most requested loan products among small businesses were the renewal or restructuring of overdrafts and requests for a new loan or restructuring of a loan. These findings reflect what we are seeing in agriculture; while farmers are investing and expanding in their businesses, there is a continued need for the banking sector to support farm businesses with credit difficulties and to provide flexibility through working capital and short-term funding products, such as stocking loans, for the farming sector.”
He concluded, “The growth in agriculture seen in 2010 has continued into 2011, with growth in output at farm level and agri-food exports. Demand for food continues to increase at a global level. Irish farming requires a banking sector that supports the expansion targets set out in <i>Food Harvest 2020. </i>This means access to credit at a competitive rate, with appropriate products and timely decisions on credit applications.”