Tánaiste and Minister for Finance Simon Harris and Minister of State Robert Troy have welcomed the signing of the Credit Review Bill into law. 

The role of the Credit Reviewer was established in 2010 by the then finance minister to assist viable SMEs and farm businesses in obtaining access to credit from Irish banks. 

The Credit Review Act establishes 'An tSeirbhís um Athbhreithniú Creidmheasa' (the Credit Review Service) as an independent statutory body offering an informal appeals mechanism for SMEs and farmers denied bank credit.

The act also provides for the ability to extend the service to regulated non-bank lenders in the future as the SME credit market evolves.

The bill has been signed into law by President of Ireland Catherine Connolly.

Importance to economy

Tánaiste Simon Harris said: "I very much welcome the passing of the Credit Review Bill given the importance of small and medium enterprises and farmers to the Irish economy. 

“Over two-thirds of employment in Ireland is with these businesses.

"It’s therefore vitally important that they can access credit in order to thrive and grow.

“By putting the Credit Review Service on a statutory footing, we are also ensuring there is greater fairness and transparency in relation to lending decisions."

During the debate on the Bill in the Seanad, Minister of State Robert Troy said the work the Credit Review Office has done since it was established in 2010 has "given valuable assistance to viable SME and farm businesses in obtaining bank credit".

"Placing the office on a firm statutory basis recognises that value and endorses the Credit Review Service as a permanent feature of the SME credit landscape in Ireland," he added.

Credit decisions

Since its establishment in 2010, the Credit Review Service has received 1,468 formal applications.

The Credit Review Service has supported almost 60% of businesses and farms that have appealed credit decisions resulting in over €86 million in additional credit for SMEs and farm businesses.

The Credit Review Service’s key role is to examine participating banks’ credit decisions for SME or farm borrowers which have had an application for credit of up to €3 million declined or reduced, where the borrower has a viable business proposition.

In effect, it acts as a mediation service between the borrower and the banks, in a process that results in recommendations to the bank on the credit agreement they could extend to the borrower.

The lender is not obliged to accept the recommendations, since the decision to extend credit is always a commercial decision, but it must explain if it does not accept them.