Farmers are slow to move from their bank and explore other options, according to a representative of the Irish Creamery Milk Suppliers’ Association (ICMSA).
However, the chair of the ICMSA’s Farm Business Committee, Shane O’Loughlin, noted that there are not many choices available to farmers in Ireland.
His comments follow confirmation on Monday (January 24) that Permanent TSB (PTSB) is to offer finance to farmers under the Brexit Impact Loan Scheme (BILS).
The BILS is delivered by the Strategic Banking Corporation of Ireland (SBCI) through participating lenders, including PTSB; AIB; Bank of Ireland; and five Metamo Credit Unions.
Low cost loans are offered for terms of up to six years to eligible businesses, including farmers, that have been impacted by the UK’s decision to leave the European Union.
ICMSA
O’Loughlin said that the inclusion of PTSB in the scheme is a welcome option for farmers but observed that competition overall in the Irish financial landscape was lacking.
“The vast majority of banking by farmers is done by the two main banks; AIB and Bank of Ireland. I think the banks are playing on that, farmers are slow to move.
“But really and truly for the whole of banking community you are down to just three main options at this stage, after that you are down to credit unions and maybe the likes of Finance Ireland. So banking options are very poor,” O’Loughlin outlined.
Although many people have good relationships with their bank, the ICMSA chair said that he had been contacted by farmers who had experienced poor customer service.
“You see a lot of the advertisements that you will have finance or money arranged within 48 hours. I mean, come on, get real. I had one fella who rang me that was trying to organise finance for spring and it took the bank six weeks,” the ICMSA chair said.
O’Loughlin believes that the day of dealing with local bank managers is “almost gone” and that is “bone of contention for farmers”.
“In so many cases now you’re just ringing a call centre. You have an issue that’s very important to an individual farmer and it might take several phone calls. But every time you ring up, you get someone different and you’re having to explain and start all over again. That’s damn frustrating,” he explained.
European banks
The ICMSA chair said that the government will need to address the issue of competition within the Irish financial sector.
“I think the record would show that an awful lot of financial institutions that came to Ireland have left again.
“Is the business not here or is here scale not here to make it worthwhile? Why is it so expensive for other institutions to set up here and do business?
“Can we not be making more use of our internet banking with other banks? We’re in the EU, it is supposed to be a common market – what can’t we deal with European banks?” O’Loughlin asked.
“When it’s on the internet, it doesn’t matter whether it’s a bank in Dublin, Cork or Dusseldorf. It’s all just pressing a button. The local influence is gone out the window already so it doesn’t matter if the person on the other end of the phone is in Germany or in Dublin,” he concluded.