The research is likely to reopen the debate as to whether the country’s bailed out banks are open for lending to Irish business.
The Irish SME Credit Supply and Demand, Comparisons Across Surveys and Countries report comes from two economists at the Central Bank.
Changes in terms and conditions of bank credit, including interest rates, collateral
requirements and the size of available loans, in Ireland are also among the least favourable in the euro zone, the study showed.
The Central Bank report also said that on the demand side, Irish credit demand is at or close to the euro zone average.
One of the authors of the report said the study definitively shows Ireland to be one of the toughest places in the euro area for small businesses to get a loan.
He rejected criticism of the report from the Irish Banking Federation, who said the only definitive report on lending was the Government-commissioned Mazars report, which said that banks were meeting the demand for loan applications from small businesses.
Speaking on RTE’s News at One, Central Bank economist Fergal McCann said his study uses the Mazars report, alongside a ECB/European Commission (SAFE) survey, to give a more accurate picture of the situation.
He said: “While Irish banks have been recapitalised with enormous fiscal injections, the truth of the matter is the bailed-out banks are not fixed, rescued bankers continue to utter untruths, banking reform is delayed and banking policy is turning good business bad.
It said the report on bank lending “lifts the cloak of pretence that the banks are willing to lend to anyone other than a chosen few”.
Bank of Ireland Business Banking Director Mark Cunningham said the report indicates that the share of firms that require but do not apply for credit, due to the belief that they will be rejected, is double the euro area average.