A survey by the Irish Small and Medium Enterprises Association has revealed that 52% of small and medium Irish businesses who have applied for funding in the last three months say they have been refused loans by their banks.
The survey also shows 38% have experienced an increase in charges and 23% have seen an increase in their interest rate.
It confirms the evidence of an EU Survey on Access to Finance in the euro area that found Irish small and medium enterprises were the second least successful, after Greece, in getting a loan from their banks.
ISME Chief Executive Mark Fielding says the survey shows the Government's instruction to the banks to increase access to funding for viable companies is being ignored.
The survey also revealed that 66% of firms say they believe the banks are making it more difficult to access finance, while 92% say the Government is having little or no impact on SME lending.
ISME has called on the Government to stop merely acknowledging there is a problem and take action, including making bankers accountable to the Government through the central bank.
It accused banks of "giving the Government the run around", while the small and medium business sector continues to struggle, despite assurances of credit availability.
Meanwhile, the Irish Banking Federation has said that the ISME survey on SME credit is ''not accurate as it is not representative of marketplace activity.''
It said that the independent SME Lending Demand Study, published by the Department of Finance and undertaken for the Department by Mazars, provides the most reliable and comprehensive picture.
That study shows a 70% credit approval rate, it said.
''It also shows that credit is being sought by just one-third of SMEs, largely for renewal or restructuring of existing facilities'', it added.
