N Ireland banking system broken: FSB

Wilfred Mitchell, the Northern Ireland policy chairman of the Federation of Small Businesses, said Ulster’s banking system was risk averse, with the situation exacerbated by a series of branch closures.

Giving evidence to MPs last week at a meeting of the Northern Ireland Affairs Committee, Mr Mitchell said “an apathy and weariness is setting in” driven by a loss of direct relations with bank managers and a lack of funding.

He added: “The banking sector needs to be offering small to medium-sized businesses who aren’t experts on finance easy access to funding, but this is not forthcoming. SME loans fell by 24 per cent on the mainland between 2007 and 2010, and this figure is even higher in Northern Ireland.”

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Roger Pollen, the FSB’s head of external affairs added that a lack of competition among the province’s four main banks made the borrowing landscape very different to Great Britain, and criticised the British Banking Association (BBA) for not disclosing SME lending figures in Northern Ireland as it does on the mainland.

The BBA would not comment on the criticism.

Mr Pollen said: “The banking sector is unhelpful and unwilling to lend and support firms with funding, and is not willing to think outside the box.”

He added that the UK government had missed an opportunity to extend the recently launched TSB bank’s reach into Northern Ireland to increase competition.

Adviser view:

Steve Laird, director of Belfast-based Carrington Wealth Management, said: “From speaking to friends and clients who are business owners, it’s almost impossible to get funding, even if it’s a ‘no-brainer’ opportunity. I’ve seen more interest in other funding arrangements such as crowd-funding and government loan initiatives, and an improvement in the property market will hopefully get the economy moving a bit, but I would also encourage the banks to be more entrepreneurial over here and think up some new offerings to help the business community.”