The Department of Finance has published the latest in its series on SME Credit Demand Surveys which covers the period January 2023 –December 2023. This is the first survey in this series that covers a full calendar year, with the survey being conducted bi-annually previously. The last bi-annual wave covered the period April-September 2022.

This survey series is currently being conducted by Ipsos B&A, on behalf of the Department of Finance. It is the most comprehensive survey of SME Credit Demand in Ireland, covering over 1,500 respondents through in-depth discussions. The survey captures a full picture of the SME landscape in Ireland, with micro-enterprises, small-sized enterprises and medium-sized enterprises accurately represented as per the percentage make-up of SMEs in Ireland.

Key results include:

  • Of SMEs surveyed, 18% applied for bank credit in 2023, broadly unchanged over recent years. The majority of those not applying stating they had sufficient internal funds (76%). Over the last decade, the share of SMEs applying for bank finance has fallen by around half, from 35% to 18%.
  • Of the SMEs that applied for bank finance in 2023, 88% had their application accepted, with 11% denied and 1% still awaiting approval. This pattern was in line with previous years.
  • Business conditions in the SME sector were broadly positive in 2023. 82% of SMEs surveyed reported no change or an increase in turnover, similar to previous years. Likewise, 88% of firms reported they had made a profit or broken even, similar to previous years. Medium-sized firms were more likely to report increased turnover and profitability compared to small or micro firms. The Hotels and Restaurants sector had the highest percentage of firms reporting an increase in turnover. The percentage of SMEs exporting in 2023 was 22% up from 19% in the previous wave.
  • 53% of SMEs reported increasing the price of their main product or service during 2023, with 44% reporting no change and 3% a decrease.
  • 16% of SMEs invested in climate-related activities during 2023, with the highest investment levels being seen for energy efficiency followed by new, less polluting technologies.
  • Average interest rates reported by SMEs rose to 7.21% in 2023 compared to 5.13% recorded in April – September 2022.
  • The average value of a credit application for new finance in 2023 was €186,000. The average SME has €369,000 of outstanding debt (down from €427,000 in the previous survey) and assets of just under €5 million. Outstanding debts owed to retail banks account for over half (56%) of all debts owed, with other non-banks accounting for 42%.
  • Survey responses indicated that 58% of applications were processed by the banks within the regulatory limit of 15 working days. Of those refused credit, 33% of SMEs recall being informed of their right to an internal review by the bank, up from 22% in the previous wave. 50% of SMEs report not being informed of their right to appeal to the Credit Review.
  • The percentage of SMEs exporting in 2023 was 22%, up from 19% in the previous wave.

On the publication of the SME Credit Demand Survey Minister for Finance Michael McGrath TD stated:

“I welcome the results of the latest wave of the SME Credit Demand Survey. SMEs are the lifeblood of the Irish economy accounting for 99.8% of all businesses and 69.2% of all employment in the business economy.

Today’s report is a critical tool to understand how the sector is performing and how needs for credit are being met. The survey series provides Government with vital information on which to base policy initiatives that support businesses to manage rising costs and further invest, including the Temporary Business Energy Support Scheme (TBESS), the Ukraine Credit Guarantee Scheme (UCGS) and the Growth and Sustainability Loan Scheme (GSLS), among a range of other policy measures.”

DOWNLOAD THE FULL REPORT: SME Credit Demand Survey – January 2023 –December 2023

Background of report

The SME Credit Demand Survey was conducted twice-yearly from 2011 to 2022 to monitor trends in access to credit by SMEs. The 2023 report was based on the full calendar year and the survey will be carried out annually in future.

The Department has commissioned this SME Credit Demand Survey to have a representative and reliable source of evidence on the business environment for SMEs and their need for credit. The survey was conducted through telephone interviews covering over 1,500 businesses. It drew on a carefully constructed sample from a large database of SMEs and made repeated calls to ensure a full response and asked factual questions. The full questionnaire is included in the report. The report and previous reports are available on the Department of Finance website at: SME Credit Demand Surveys.