BANK FUND TO SUPPORT NEW BUSINESS
Allied Irish Banks is to set up a new €500 million fund to increase the flow of credit to small businesses. Representatives of AIB, Bank of Ireland and Anglo Irish Bank met the Minister for Enterprise, Trade and Innovation, Batt O’Keeffe last week and he urged them to make more money available, according to the Sunday Business Post. O’Keeffe said subsequently that he expected a “significant” announcement early this week about extra credit for SMEs.
The Minister intends to launch a new plan for enterprise within the next fortnight. It will have two distinct strands – an examination of the indigenous enterprise sector and a focus on issues such as foreign direct investment and an increase in the export base. O’Keefe also plans to meet Commissioner Maire Geoghegan-Quinn this week – she has responsibility for research, innovation and science in the EU. They will look at the possibility of European funding for innovation schemes in this country.
Meanwhile, the Sunday Tribune reports that the current account balances of small and medium business customers at the two main banks are beginning to improve. More small firms are moving into the black in 2010 in comparison to last year, according to AIB and Bank of Ireland. This is a sign that businesses are beginning to experience the positive change in larger economic trends.
“It’s a sign that SMEs can meet their debt service and current costs, that their funding is sound and they’re building reserves,” Michael Lauhoff, head of small business banking at BoI was quoted as saying. But, he said, they were still reluctant to invest or spend because they are nervous. He cited €1 billion in unused overdraft facilities among Bank of Ireland customers. David Roberts, of AIB, said, overall, small businesses were “still bobbling along the bottom” and not keen to borrow for expansion yet.