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Central Bank publishes SME Market Report 2019

Apr 26, 2019
The Central Bank of Ireland has published its SME Market Report for 2019. The SME Market Report aims to provide a timely monitor of developments in the provision of credit to Irish Small and Medium Enterprises (SMEs) by financial intermediaries.

The SME Market Report for 2019 finds that:
  • Gross new lending to SMEs declined 1.7% in the year to 2018 Q4, driven by manufacturing, wholesale, retail, trade and repairs and primary industries, with increases elsewhere.
  • Market share among the top three banks is high at 90.3% of new SME lending and concentration in the flow of new lending has stabilised since Q2 2016.
  • Credit demand remains low compared to previous years with 20% of SMEs applying for credit in the period from April to September 2018. A large majority of micro, small and medium firms finance investment from internal funds.
  • Working capital remains the most common reason for credit applications among micro and small firms, whereas credit for growth and expansion is more common among medium firms.
  • Irish SMEs are more reliant on leasing and hire purchase for investment activities than the EU average but are less reliant on bank loans.
  • Rejection rates on bank finance applications have tended to stabilise recently.
  • Interest rates on small NFC loans in Ireland are on average 5.7%. Similar size loans are on average 2.5% in other parts of Europe.
  • SME default rates have declined from 19.8% in December 2017 to 17.5% in June 2018.
  • SME transitions into default over the period December 2017 to June 2018 were 2%.
Published: 24 April 2019.

Source: Central Bank of Ireland.