Minister Donohoe welcomes latest result of SME Credit Demand Survey

3rd July, 2017

Survey shows demand for credit is low and that the number of businesses reporting a profit has increased for the fourth year in a row


The Department of Finance has today (Monday) published the latest in its series on SME Credit Demand Surveys which covers the six month period October 2016 to March 2017. This survey series, currently being conducted by Behaviour and Attitudes on behalf of the Department of Finance, is the most comprehensive survey of SME Credit Demand in Ireland, covering over 1,500 respondents through an in-depth discussion. The survey covers all the various sizes of SMEs be they micro enterprises, small-sized enterprises or medium-sized enterprises.


Some of the key findings of the survey include:

  • Favourable trading conditions remain for SMEs with 84% reporting a stable/increased trading performance and 61% reporting a profit over the six months from October 2016 to March 2017.
  • During the period of this survey (October 2016 to March 2017) some 20% of SMEs requested credit and within that 88% of completed credit applications were approved or partially approved.
  • Of those who did not request credit, 89% of SMEs stated that they did not seek credit because they did not need it.
  • 45% of respondents believe that the banks are lending to SMEs and only 1% of SMEs did not request credit because they felt it was too expensive to borrow.
  • Working capital/cash flow requirements has edged ahead as a main reason for finance requests (31%, up 4% from September 2016), followed by expansion requirements (23%, down 3%) and purchases, replacement or lease of new vehicle/equipment (21%, down 8%).


On publishing the results of this most recent survey, the Minister for Finance & Public Expenditure and Reform, Paschal Donohoe T.D., said: ’The results of this latest SME Credit Demand Survey show that demand for credit continues to remain low from micro and small-sized enterprises. However, encouragingly, the number of businesses reporting a profit has increased for the fourth year in a row, and a higher proportion of SMEs than ever are pursuing a growth strategy.  The mind-set of SMEs remains focused on stabilisation and moderate growth of the business’.


“I would like to express my sincere thanks to each of the SMEs who took the time to participate in the survey.  The information gathered allows us to gain a better understanding of the SME credit and lending landscape and is truly an invaluable resource that allows us to develop, refine and implement policy measures to support our indigenous businesses.


“As evidenced in the Programme for a Partnership Government, we remain committed to ensuring that all viable businesses operating in Ireland should have the opportunity to access sufficient finance to meet their enterprise needs in a manner that supports growth and employment in the economy.”






Notes for editors

Background to the series of SME Credit Demand Surveys

Bank of Ireland and AIB agreed in July 2011 to fund an independent review on credit demand by SMEs, which was commissioned by the Department of Finance following a public tender competition. The first eleven reviews covered the period April 2011 – September 2016. The review published today covers the period October 2016 to March 2017.


The review, carried out by Behaviour and Attitudes, examined the demand for credit through a telephone survey covering over 1,500 businesses. The survey was of high quality, drew a carefully constructed sample from a large database of SMEs, made repeated calls to ensure a full response and asked factual questions. The full questionnaire is included in the report. The report and previous reports are available on the Department of Finance website at


Key Findings of the Report

Demand for credit


  • 20% of SMEs requested credit (Sep 2016: 23%). The decline is mainly driven by micro- and small-sized companies.


  • In addition, the survey indicates that the mind-set of SMEs remains focused on stabilisation and moderate growth of the business post-recession rather than pursuing significant investment opportunities.


  • Only 5% of SMEs applied for bank finance in order to restructure a loan/credit, similar to 5% in September 2016 and 7% in March 2016.



Decisions on credit


  • 75% of credit applications were approved or partially approved (Sep 2016: 76%), 11% of credit applications were declined (Sep 2016: 15%) and 14% of credit applications are still pending (Sep 2016: 9%).
  • The decline rate continues to be the highest for micro enterprises at 21%, same as September 2016.
  • When the pending applications are excluded, the approval/partial approval rate is 88% (Sep 2016: 84%) with 13% declines.



Reasons for not requesting credit


  • 89% of SMEs stated that they did not seek credit because they did not need it (Sep 2016: 86%).
  • Only 1% of SMEs report that they did not request credit because they felt it was too expensive to borrow.
  • Additionally, only 1% of SMEs indicated the reason for not seeking credit was due to it not being the right time given the economic conditions.
  • 2% have not applied for credit due to fear of possible rejection (Sep 2016: 1%) while 2% have not applied as they believe the banks are not lending (Sep 16: 1%).




  • Looking at the banks’ behaviour as illustrated by the report, 73% (Sep 2016: 86%) of SMEs who were refused credit did not agree with the reason provided by the bank for the refusal.


  • In 20% (Sep 2016: 47%) of cases where applications were declined, the company said that the bank informed the borrower of the right to an internal review.



 Awareness of Credit Review Office


  • 39% of those applicants who were refused bank finance by the two pillar banks said that they were informed of their right to a decision review by the Credit Review Office. This is slightly down from 43% in September 2016.



 Awareness of Government Support Initiatives


  • Looking at State funded support, awareness is highest for Enterprise Ireland (86%, unchanged) followed by Local Enterprise Offices (70%, up 3%).


  • 41% of SMEs are aware of the Credit Guarantee Scheme (Sep 16: 40%) while 33% are aware of Microfinance Ireland/Microfinance Loan Fund (Sep 16: 32%). Awareness of the Supporting SMEs Online Tool decreased by 7% to 22%. 


  • Awareness of the Strategic Banking Cooperation of Ireland (SBCI) is 20% – down 1% since September 2016.