The PFB has presented the latest findings of its economic downturn panel to give a true picture of market conditions and lending restrictions to the Government.

Just over half of all respondents (53 percent) believe that financial service organisations, including banks, are less able to manage risk than before. In addition, 55 percent believe that the banks' support for smaller firms has diminished, with 45 percent criticising the Government's lack of support. In addition, 27 percent of respondents said that terms and conditions of loans have deteriorated over the past month and for overdrafts, 28 percent experienced a deterioration of terms and conditions.

In all, 30 percent of panellists said that access to finance, including additional banking fees, arrangement charges and outright rejections for lending, has become more of a problem.

Small businesses reported an overall decline in market conditions and lending, as well as in confidence in the banks and the Government. During the past month, 61 percent of panellists suffered because of an increase in late payments from customers.

At the second meeting of the Small Business Finance Forum, delegates agreed a statement of small-business lending principles from the banks and to set up a monitoring panel, requiring banks to provide more frequent, detailed information about lending levels. In addition, banking representatives agreed to put in place mechanisms to allow dissatisfied small-business customers to switch banks more easily. The next meeting of the Forum will take place in mid-January.