Thursday 26th June 2014
One-in-four SME loans to Irish businesses in default at end of 2013
New lending to Irish small business sector is static, according to Central Bank report
One in every four loans to Irish small and medium-sized businesses was in default at the end of last year, according to official figures due to be published today.
The amount of money owed by small and medium-sized enterprises (SMEs) to the Republic’s banks has fallen steadily over the last year three years, while new lending to the sector remains static, the Central Bank’s SME Market Report shows.
The study finds that these businesses, responsible for most of the employment in the Republic, owed a total of €21 billion at the end of December 2013, down from between €26 billion and €28 billion in January 2011.
At the end of 2013, the average SME owed its bank €71,101 and was paying interest at 6.41 per cent. The numbers show that just over 26 per cent of all loans to the sector were in default, meaning that repayments on these debts were 90 days or more overdue.
The report states that 41.4 per cent of the total balance owed by the sector was overdue at that time. Default rates were highest amongst building companies, which had fallen behind on more than 60 per cent of the amount that they owed their banks.
The Central Bank states that in most sectors, the balance-weighted default was higher than the share of loans in default, which indicated that borrowers with larger individual debts were most at risk of falling behind with repayments.
Demand is stable: From the beginning of 2010 to the final three months of last year, new lending to SMEs remained between €450 million and €750 million. The Central Bank says that there had been “little discernible upward trend” over that timeframe.
Demand for credit was stable between 2011 and 2014, with 35 per cent to 40 per cent of SMEs seeking loans from their banks. Applications hit a peak of 40 per cent in March 2013 but had slipped back to 35 per cent in March of this year.
Only one-in-four applicants were seeking cash to fund growth and expansion, while 61 per cent cited working capital requirements as the reason for their credit application.
The most commonly requested type of loan was renewal or restructuring of an existing overdraft.
“Irish SMEs’ emphasis on bank overdrafts as opposed to bank loans suggests that credit demand is skewed towards shorter-term,” the report says.
Rejected applications: Between October and March, the rate at which the banks rejected these applications was less than 10 per cent lower than in Italy, France or Spain, according to the report.
However, it states that the percentage of those companies which did not apply for credit as they believed they would be rejected is significantly higher here and in Greece than in other euro zone countries.
The report points out that last month, the Government announced the creation of the Strategic BankingCorporation of Ireland, which has funds of €500 million, and which loan money to a SMEs through resident lending institutions.
May sees another big uplift in beef production in Ireland
Irish beef production in May was once again significantly ahead of year earlier levels, according to EBLEX.
It highlights Central Statistics Office figures which show that at 49,100 tonnes, production was up 18%, or 7,400 tonnes, on May 2013. EBLEX says the increased slaughtering’s follow the general trend of the year so far and in the year to date the Irish report that cattle throughputs are up 13% or 85,500 head on last year’s position.
With better conditions resulting in higher slaughter weights at 242,000 tonnes, beef and veal production in the five-month period is up more than 15% year on year.
EBLEX highlights that with the Irish beef industry very reliant on exports and the UK by far the largest destination for Irish beef, the increased imports recorded so far this year look set to continue. However, current indications are that supplies will tighten towards the end of the year will remain tight in 2015 and into 2016.
EBLEX also comments that with Irish supplies still well ahead of year earlier levels, the fact that Irish prices have remained largely stable of late is something of a positive in the current market.
However, it does note that prices do look to be edging back in more recent weeks. With increased Irish supplies, the price differential is making it difficult for UK product to compete. With falling prices in the UK, the price differential has narrowed considerably.
Nonetheless, EBLEX states that the price differential it is still higher than it was for much of the first half of 2013 and is still relatively high in the historical context. As such, it says it remains likely that the pressure on the UK market is set to continue until supplies tighten or demand improves markedly.
There are 14 times more Irish people looking to adopt children than there are children available to adopt
However the Children’s Rights Alliance has warned that Ireland must not adopt from countries not inside The Hague recommendations.
Irish politicians heard today that there are 14 times more Irish people looking to adopt than there are children available.
The discussion at today’s Oireachtas Committee on Health and Children centred on the number of couples looking to adopt, which far exceeds the number of children.
Witnesses at the committee were giving evidence about Ireland’s relationship with other countries in terms of adoption. Current legislation only allows for adoptions between certain nations, restricting the number of children that can be adopted into the country.
The Children’s Rights Alliance argued that Ireland must continue to work within The Hague convention countries as adoptions outside of these countries can be perceived as ‘corrupt’.
Maria Corbett from the Alliance said The Hague sets out the minimum requirements for countries that children are being adopted from.
If we go outside these countries, we cannot trust their procedures.
“They can be involved in child trafficking and even deception of parents for profit.”
She said, “I understand the pain of parents and I don’t want to stigmatise children currently living in Ireland who have been adopted from Vietnam or Russia but we are not able to trust policies in non-Hague countries.”
“We have to resist the emotional request from families to move outside of Hague.”
Trish Connolly from the International Adoption Association told the committee, “I have a nine-year-old at home. She can hear the radio, she can watch Prime Time.
On the way into school she asked me, ‘Mummy was I stolen? Mummy how much did you pay for me?’.
The Irish experiences: The TD Clare Daly said there’s no doubt that many of the children who left Irish institutions and were adopted by Americans went into loving homes but that is not the issue.
“The issue is what happens down the line as every child will want to find out about their birth parents.”
Susan Lohan from Adoption Rights Alliance highlighted that we have no idea how these countries will deal with people who come back looking for records.
“If you respect children’s rights we cannot entertain working with countries outside The Hague.
We know all too well that adoption can be corrupted.
Too restrictive: Coming from a different perspective, Ruth Lennon from the International Adoption Association said that the Adoption Act is too restrictive.
“Just over 18 million children worldwide have lost both their parents.
There are still 100,000 children languishing in institutions worldwide.
She added, “We’re concerned intercountry adoption has no direction.”
During his testimony, Kiernan Gildea from the Adoption Authority of Ireland said that there are at least 14 times more couples wanting to adopt children than there are children available in Ireland.
He said that most prospective parents want to adopt young and healthy infants.
However he added that older children and children with disabilities remain in orphanages.
“There is no doubt that there are children available in Ethiopia but they don’t have the infrastructure in place, they have said no to a bilateral agreement.
What can we do in that situation, we can’t force them.
He also added that the number of children available for adoption is decreasing worldwide.
Big concerns at slow progress of Irish ‘digital media strategy policy’ among Irish SMEs
Puttnam notes steps forward around education and the elderly but says ‘urgency’ needed
Ireland’s “digital champion” Lord David Puttnam is disappointed with the progress of the National Digital Strategy for small and medium businesses but says the scheme is making good progress in other areas.
The State’s “digital champion” Lord David Puttnam is disappointed with the progress of the National Digital Strategy among small and medium businesses but says the scheme is making good progress in other areas.
Lord Putnam said the digital strategy has made “pleasantly surprising” progress in education and in helping elderly people to use the internet but “SMEs haven’t done as well as I’d hoped”.
One of the core aspects of the digital strategy, which was launched one year ago, was to provide grants of up to €2,500 to encourage SMEs to build an online presence. Research conducted as part of the strategy found that tens of thousands of Irish small firms do not trade online and were losing valuable opportunities to access larger markets, increase revenue and acquire better market intelligence.
Speaking at the National Digital Strategy update conference in Dublin today (thu), Lord Puttnam said more than 1,000 of these “trade online” grants had been given out so far.
Lord Puttnam, a multi-award winning former film producer, said he was “broadly encouraged” by Ireland’s progress but added “I think we’re being a little slow. I think we could do with more of a sense of urgency.”
But he said this was a common problem in virtually all European governments, with the possible exception of Estonia. “I think the world is changing and individuals are changing much quicker than Government is responding.”
He added: “Many people I talked to, certainly in the UK, kind of wish this wasn’t happening; it’s very inconvenient. The problem is, it is happening.”
Minister for Communications Pat Rabbitte told the conference that some 47,000 small companies in Ireland either don’t have a web presence or do business online.
Addressing the audience via Skype from a school on Arranmore Island, Co Donegal, he announced a further €400,000 in funding for a digital training programme. Digital technology, he said, is “the way of the future”.
New Internet web tool to help manage depression
A new internet-based programme that aims to help people manage depression has been launched.
According to the Department of Health, the iFightDepression programme is a ‘guided self-management tool’ for people with mild to moderate depression. It has been developed by the European Alliance Against Depression (EAAD).
The tool is multilingual and will initially be available in English, German, Spanish, Dutch, Hungarian, Bulgarian and Estonian.
“The tool is intended to help individuals with mild to moderate depression to self-manage their symptoms and promote recovery through informative modules, associated worksheets and mood questionnaires to encourage practicing of new skills and self-monitoring.
“The ‘guided’ element to the iFightDepression tool ensures that individuals maintain contact with their GP or healthcare professional throughout their use of the tool. The tool is free to use and is based on principles of cognitive-behavioural therapy,” the EAAD noted.
Speaking at the launch of the tool, Junior Health Minister, Kathleen Lynch, described it as ‘an invaluable resource’ for those with mild to moderate depression.
“The tool offers immediate access to a lower-intensity psychological intervention. It is free to use and comes in two versions – one for adolescents and young adults aged 17-24 years, and one for adults. The tool is implemented through healthcare professionals, who will maintain a recommended level of contact with the patient,” she commented.
Deputy Lynch added that because it is internet-based, it will ‘empower patients by virtue of its accessibility, regardless of time of day, geographical location and financial status’.
Dragon-fish find highlights threat posed by release of exotic species
The discovery of the remains of an exotic dragon-fish on the River Suck (above left) has raised concerns over the damage being done to Irish waterways by the release of non-native organisms into the wild.
The dragon-fish may have been brought into the country as pike fishing bait and although it is unlikely that it was brought here alive, Dr Joe Caffrey of Inland Fisheries Ireland said it could still damage our native biodiversity.
“There is a possibility that discarded fish could still have parasites, viruses or bacteria that would be alien to Ireland and if the fish are eaten, they could indeed pass that on to our native species,” he said.
The discovery follows the rescue of a yellow-bellied slider turtle in Co Limerick last week and Dr Caffrey said Ireland has suffered from the introduction of a number of non-native species.
Pointing to a 2005 incident when the introduction of curly leaved waterweed into Lough Corrib caused havoc for native plant and insect species, Dr Caffrey said people need to be aware of the potential damage exotic animals or plants can inflict upon our unique wildlife.
“Very few people would do this on purpose. It really is down to a lack of knowledge and really the message we in fisheries are trying to get across is that non-native species should never be discarded into natural watercourses,” he said.