The head of the Credit Review Office has recommended to the Government that the threshold at which SMEs can appeal a bank’s decision to refuse them finance be increased to €3 million.

John Trethowan has called for the upper threshold to be increased from the current level of €500,000.

He said this would be desirable due to the limited number of active banks here. Mr Trethowan said many SMEs would be required in the coming years to refinance loans that are held by banks that have either withdrawn from the Irish market or pulled back on their activities.

Many of these requests for lending are expected to exceed the CRO’s existing upper threshold, he added.

Bank of Ireland and AIB are required to sanction €4 billion in lending to SMEs this year. Mr Trethowan said one-third of the sanctions in the first quarter was new lending with the balance effectively a refinancing of existing debt.

Of the new lending, 24 per cent was farm related.

Mr Trethowan warned that there are too few suppliers in the SME market here, which could hamper recovery.