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Friday 24 March 2023 Dublin: 11°C
Andres Poveda Bibby managing director Ronan Horgan
# risk aversion
Bank 'cherry-picking' hurts SME sector
Only the very strongest companies are getting bank funding, according to one lender.

IRISH SMALL AND Medium Enterprises are struggling to secure credit with banks likely to pick the least risky candidates for loan approval, an expert has said.

Bibby Financial Services managing director Ronan Horgan said that the sector needs to look outside of the traditional high-street banks for finance if it is to survive.

He said: “Our experience is that the banks are probably cherry-picking to a certain extent the better quality clients.”

Horgan said that up to 80 per cent of SME lending in the United States comes from non-bank sources, and that the only way to fund the sector was for businesspeople to expand their funding horizons.

He also said that Irish SMEs struggle to secure payment on time compared to other markets, and are often slow to aggressively pursue larger debtor companies for prompt payments.

“You’ll find in Germany they pay on time, but that’s not the case here in Ireland”

He was speaking at the opening of the new Bibby office in Dublin. The unregulated lender has been active in the Irish market for eight years, with a particular focus on the SME sector.

Bibby today also launched a bad debt protection product that covers SME owners in case a debtor company goes bust.

“One of the concerns an SME would have…is what happens if my clients become insolvent. In the event of default, they can call in that product.”

The Government wants to hear from cash-strapped SMEs>

SME sector ‘over-reliant’ on banks>

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