If the announcement today from AIB is taken at face value it is a very positive step for SMEs all over the country. The shift of a lending decision back from the so called business centres to branches is a good move. After all it is the branches who see the owners of the SMEs on a daily basis, deal with their issues and know the business in as much as possible from a banking perspective.
Getting back to the core idea of banking in knowing your customer, assessing their needs and ability to repay on a face to face basis rather then some junk pumped out of a spreadsheet by a faceless person is surely a back to basics idea which is very welcome.
I have a few concerns though and the first being that this is a simple PR exercise and will simple produce faster NO answers! There needs to be a commitment of funds and confidence in the branch level personal to ensure they can lend when they want too.
My second concern is do the branch staff actually know how to do real banking any more?Before the crises they were involved in simply selling and with no regard for assessing a customers ability to pay. Now things have come full circle and we need the skills of the old style bankers who know their customs and could make good sound lending decisions. Are these people still in the banks and if so will they really be given the money to lend. Time will tell and very quickly if what the AIB statement says is true.
I will be taking myself down to my local AIB with my excellent business plan looking for €25k and the answer the day after! I cannot wait and of course I will keep you posted!
Paul C Carroll Accountant
NEO Financial Solutions