IFA calls for new protocol for those in financial difficulties
The current structure for negotiations between banks and small businesses in dealing with credit difficulties is not working, according to the IFA and other associations.
The Irish Farmers’ Association (IFA), the Vintners Federation of Ireland (VFI), Irish Property Owners Association (IPOA) and RGDATA have come together to say that the current basis on which negotiations between banks and small businesses in dealing with credit difficulties, is not working.
In a joint statement issued this morning (Monday), the group said: “While the Irish economy is beginning to recover from the worst recession experienced in a generation, a significant number of small, family-owned enterprises are still facing financial difficulties. There remains a pressing need to ensure that these difficulties are resolved in order to maximise the numbers employed in small enterprises across Ireland. Regrettably, 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 for some businesses.”
It said that acceptable compromise and viable solutions are not being reached and that, in some instances, banks are imposing unreasonable conditions on customers seeking to refinance, which are just not achievable. This results in high levels of stress and anxiety for the business owner and their family.
The group’s key demands are:
- Banks must seek resolutions that preserve the viability of the underlying business and maintain employment;
- For all negotiations, a clearly identified point of contact in the bank must be agreed, who has responsibility for delivering a sustainable solution acceptable to both parties;
- A dispute resolution/mediation service must be employed where banks and borrowers cannot reach agreement; and,
- Agreements reached must be full and final.
IFA President Eddie Downey said, “If we are going to maintain the maximum number of viable farm businesses, there must a fundamental change in the process of negotiation with the banks. Both the borrower and lender must be prepared to contribute to a sustainable solution, with negotiations entered into on the basis of reaching full and final settlement”.