SMALL FIRMS are finding it increasingly difficult to access credit, according to a survey from business group Isme.

The organisation’s latest quarterly bank watch survey reveals that banks are refusing 48 per cent of credit applications from member companies. This compares with a refusal rate of 33 per cent in the preceding quarter.

In addition, 79 per cent of firms have reported that banks are making it more difficult to access credit, compared with 68 per cent in the last survey.

Isme chief executive Mark Fielding said the findings were alarming and showed the issue of bank credit remains a serious problem.

However, the Irish Banking Federation, which represents more than 70 financial institutions, rejected the survey which it said was based on “spurious research and is highly misleading”.

“The independent, Government-appointed Credit Review Office shows that viable businesses can and are obtaining credit. IBF strongly encourages businesses seeking credit to apply to their lender with a fully supported application,” it said.

However, Mr Fielding said “it is quite clear that the previous administration’s instructions to open up lines of credit to business have patently been ignored by the banks”.

“The new Government must take a much stronger position with bailed-out banks’ management and insist on their compliance with instructions.”