Galway Independent Column - 24 November 2010

They say that a week is a long time in politics…well it certainly has seemed like a long time since this day last week. A lot has happened on the Ireland Inc front and it’s still happening. At the time of writing we are not clear on all the detail of the so called ‘bailout’ and what exactly the multibillion euro rescue package from the European Union and the International Monetary Fund will involve. Questions remain but the one question that’s answered is ‘Is it happening?’ ‘Yes, it is’.
Bank of Ireland Group Chief Economist Dan McLaughlin writing on issues affecting the retail sector recently said that fears about the economy has resulted in consumer confidence falling and spending easing back. He said: ‘People tend to save more and spend less when unemployment is rising and there is a consensus at the moment that unemployment is peaking. The number of people being made redundant each month has fallen quite a lot. If the labour market has bottomed out we may see growth in the economy of 2 to 2.5% next year and the outlook will be a lot better for the retail sector than it has been. Of course, the current uncertainty adds to the down side risk.
‘Curiously’, he added ‘consumer confidence rose after last year’s budget probably because it gave them some certainty; they need that same certainty again’.
We could all do with some of this certainty. If consumers are afraid to spend because they don’t know what’s around the corner, then the ripple effect permeates business at every level. The upcoming Budget has seemed to be coming forever and is fixed in peoples minds as a harbinger of doom. If the general public is confused and fearful then certainty or a measure of certainty is needed. We now have an unprecedented situation where the Government proposing the budget has committed itself to dissolution in the early part of next year. This does not engender certainty in our nation: in our people or our funders. So, certainty allied to courage is what we desperately need. Isn’t it time that the much used phrase ‘the national interest’ meant something…
Yesterday morning in the final ‘8 Tuesdays @ 8’ morning event at Galway Chamber our three council members from AIB, Bank of Ireland and Ulster Bank held an interactive session on the topic of ‘Banks…Open for Business’ where they outlined the position of the banks on credit for SMEs. Each bank is emphatically open to lend and stress that where criteria are met, SMEs will be funded.
This is good news and is reiterated in the Quarterly Report from John Trethowan, Credit Reviewer, published this week. In the December 2009 budget, the Minister for Finance announced the setting-up of the Credit Review Office to help ensure that small and medium-sized enterprises, sole traders and farm enterprises have access to credit from the banks who are participating in the NAMA scheme. The office was established to provide a process to review decisions by the participating banks to refuse, reduce or withdraw credit facilities.
In this second Quarterly Report from the credit reviewer, John Trethowan says:
‘Work is ongoing to identify any barriers to SME lending, and I have added a generic loan application form onto the Credit Review Office website to assist borrowers in making an initial written approach to any bank for lending, to overcome the ‘casual refusal’ sometimes experienced by verbal enquiries at bank branch and business centre counters.’
The office of the Credit Reviewer is there to help SMEs. It should be used. www.creditreview.ie