| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Irish Economy Last Updated: Jun 27, 2014 - 3:38 PM

Irish SME firms' weighted default rate at 41%; Credit situation like Greece
By Michael Hennigan, Finfacts founder and editor
Jun 26, 2014 - 7:22 AM

Email this article
 Printer friendly page

Irish SME firms' credit situation has been at a standstill since 2011 and the situation is closer to Greece,  Italy, Spain and Portugal than to European countries with the most favourable conditions. The default rate is 26% when measured by the number of loans, and 41% when weighted by loan balance.

The Central Bank of Ireland says in a report published today [pdf] that the outstanding balance of lending to SMEs has been steadily falling since 2011, with this pattern observable among all the major sectors of the non-financial, non-real-estate economy. Gross new lending flows to these sectors have remained between €450 and €750m per quarter since 2011 with no discernible upward trend.

The Bank says the default rate is highest for SMEs in the Construction, Hotels and Restaurants and Personal (Private Households) sectors, and is shown to increase among the largest 25% of loans.

SME (small and medium size) firms are defined as sole traders or companies with employment up to 249 and whose annual turnover does not exceed €50m or whose annual balance sheet does not exceed €43m. This is the standard EU definition of an SME:

  • Micro: < 10 employees;
  • Small: 10−49 employees;
  • Medium: 50−249 employees.

SMEs are a vital part of the Irish private sector employment base:

  • 64% of Irish private sector workers are in indigenous, non-exporting firms. 57% of all workers work in indigenous, non-exporting SMEs;
  • Huge amount of work force work in Hotels and Restaurants, Wholesale and Retail, Business and Professional Services.

Today's report notes that credit supply conditions are shown to have eased in the period 2011-2014, with rejection rates on SME credit applications falling from 30 to 20% between March 2011 and March 2014, and a steady increase in the percentage of firms reporting that the size of loan available has increased. It says that in a European context, Irish SME credit conditions remain closer to those of Greece, Italy, Spain and Portugal than to those countries with the most favourable conditions.

The share of discouraged borrowers (those not applying for credit due to the expectation that they will be refused) is significantly higher in Ireland and Greece than elsewhere in the Eurozone.

Last month the Central Bank reported that Irish SMEs held about €56bn of debt on their books at the end of last year and one third had no debt.

Today's report focuses on SMEs excludes both the financial intermediation and property-related sectors, and it says that there were loans of €21bn in the SME lending data set at December 2013, with an average and median (mid-point where there is 50% of the sample above the level and 50% below) loan size of €71,101 and €9,954, respectively.

Total credit for the SME market, excluding both the financial intermediation and property-related sectors, is shown to have fallen continually since mid-2011. The report says at end-2013 lending to firms in this category accounted for 37% of total SME credit, with the remaining 63% accounted for by lending to firms in the financial intermediation and property related sectors.

The Central Bank points out that the Government announced the creation of the Strategic Banking Corporation of Ireland, which has funds of €500m for lending to SMEs through domestic banks.

Finfacts 2014: Ireland remains biggest debtor of the western world

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Irish Economy
Latest Headlines
Finfacts launches new news site
Irish Farmers & Milk Prices: 'Shackles' off in April; Demanding safety-net in August
Irish pension managed funds returns at over 12% year-to-date in 2015
Irish chartered accountants' salary packages surge 13% in 12 months
Irish services PMI fastest rate since late 2006; Official data up only 2.4% in 12 months
Irish Economy: Tax €893m above target in year to July — €653m from corporation tax
Fact and Fiction: Time to review Ireland's economic statistics?
Irish M&A deals H1 2015: Dutch or UK firm acquires Irish firm for €32.6bn - they are both American
Irish manufacturing PMI strong in July
Irish Economy: Fall in GNP in Q1 2015; GDP rises
Irish Economy 2015: Central Bank lauds strong recovery; Time to start paying down debt
Irish Budget 2016: Ibec demands 20 tax cuts, spending and investment rises
Low pay in Ireland; Lowest social security & corporate taxes in Europe
Ireland vs Greece: Enda Kenny's false claims on growth, taxes and debt
Irish standard of living in 2014 below Euro Area average, Italian level; Prices 5th highest in EU28
Irish goods exports rose a record 30% in April - due to fake tax-related transactions
Mexican tall ship to sail into Dublin on June 17th
Irish industrial production up 20% in first four months of 2015; Construction down 2.6% in first quarter
Irish Economy 2015: ESRI slams return to boom-time pro-cyclical fiscal policy
Irish pension fund returns in average range 1.6% - 1.8% in May 2015
Irish service sector PMI remains strong; Tax avoidance clouds data
Ireland: Official unemployment rate at 9.8% in May; Broad rate at 19% — 440,000 people
Ireland: Fiscal Council warns of dodgy forecasts, no plan; OECD warns of new property bubble
Irish Public Finances: Tax revenue in first five months of 2015 €734m ahead of target
No simple measure of economic progress in Ireland: GDP & GNP defective
Irish manufacturing PMI rises in May; Production up unbelievable 45% in year to March!
ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
Ireland at 16 in international competitiveness ranking; US, Singapore and Hong Kong on top
Irish Economy 2015: Sectors to add 200,000 jobs?; Broad jobless rate at 19%
Irish Export Performance: Myths and reality - Ireland is a poor exporter
Irish Economy: 41,300 jobs added in 12 months to Q1 2015 - Construction up 19,600
China-Ireland: Economic relationship on a slow burn
Estonia, Austria, France, Ireland head global alcohol rankings
Irish Exchequer Returns: Tax receipts under target in April but ahead in year
Irish service sector PMI rose in April
Irish manufacturing PMI remained strong in April- includes overseas manufacturing
Irish Live Register + 90,000 activation scheme numbers at 439,000 in April
Ireland: Coalition drops 2018 full-employment target
Ireland Spring Statement: Noonan promises 200,000 net new jobs by 2018
Irish Economy 2015: Retail sales volume up 1.4% in month of March