Monday, June 18 10:37:37
While demand for bank credit is steady at 37pc, the refusal rate has risen again to 54pc, after slight improvements in the previous two quarters, according to the latest ISME Quarterly Bank Watch Survey, issued today.
ISME say that this clearly demonstrates that the banks are not lending and are holding back any chances of recovery.
The Association called on the Government to intervene at board and management level in both rescued banks to ensure that they are servicing the economy and lending to viable SME businesses.
Its survey found that 44pc of firms are being hit with increased charges, while 33pc suffer increased interest rate and 70pc of firms say that bailed-out banks are making it more difficult to access finance.
A massive 96pc of SME respondents disbelieve bailed-out banks' claims of 9 out of 10 loan applications successful and only 4pc of SMEs believe Government is making a positive difference to SME lending.
According to ISME Chief Executive, Mark Fielding, "It may suit the Administration to believe the fiction created by bankers' spin that the system is functioning, and it suits the bankers to maintain this fiction, otherwise why sink billions of taxpayers' money into keeping them afloat. The reality is that banks are performing at a very limited capacity in ensuring the payments system and ATMs are functioning, however when it comes to assisting the SME sector to grow, the bailed-out banks are continuing to make it difficult for SMEs to access finance, thereby hindering the economy."
"It is not good enough for politicians or their civil servants to say that they will not intervene and that they 'leave banking to the bankers'. The bailed-out banks are not fixed, rescued bankers continue to utter untruths, banking reform is delayed and banking policy is turning good business bad. The Government, the owners, must take a more hands on approach, while the system is broken, insist on opening credit lines, servicing SME customers and play their part in economic recovery. Otherwise business will stagnate, employment will reduce and the economy will suffer for a generation", Fielding continued.