Four of the State’s biggest lobby groups for small businesses have joined forces to argue that the basis on which negotiations between banks and small enterprises in dealing with credit difficulties is not working.

“It has become clear to the bodies representing family businesses in key sectors that the action of some of the banks is actively damaging the recovery of some businesses,” the four organisations said in a statement.

The groups said a new protocol was needed to ensure “greater levels of co-operation” between borrowers and lenders.

The groups are the Irish Farmers’ Association; the Vintners Federation of Ireland; the Irish Property Owners’ Association; and the Retail Grocery Dairy & Allied Trades Association. They have a total of 101,800 members.

The lobby groups are pushing for nine new guidelines to protect small businesses on top of the State’s code of conduct for business lending to small and medium enterprises.

The additional protocols include allowing borrowers to see all information held on them by their banks; lenders having to respond to letters from borrowers within 15 days; and banks appointing “main points of contact” to ensure better communication.

The groups said that if after negotiation a solution could not be reached, banks should have to pay for the appointment of “independent dispute resolution/mediation services”. These services would “put forward workable solutions, which would be binding on all parties”, they said.

Pictured are Stephen Faughnan of the Ipoa, Tara Buckley of Rgdata, Noreen O'Sullivan of the VFI and Eddie Downey of the IFA.