Availability of Credit
The Irish Government regulates the
terms of consumer credit and financing as one of the monetary tools
used to manage the economy. Normal credit terms at the trade and consumer
levels is 30 days, occasionally extending to 60 days. At the retail
level, most outlets, except grocery stores, offer their customers
credit, usually 30 days. All the normal methods of payment are available
for export sales to Ireland through a well-developed banking sector.
Competition, to a large degree, has required the use of liberal financing,
as opposed to requiring payment on a letter of credit or cash basis.
Letters of credit can be used initially for new accounts, with more
liberal terms granted if justified by volume and customer reliability.
Knowledge of industry practice and the customer is generally the prime
consideration in deciding whether to use sight drafts, time drafts,
or open accounts. Usual terms of sale are payment within 30 to 90
days after delivery, varying with the commodity and the credit standing
of the purchaser. Large American banks can advise on using letters
of credit as well as on short-term credit financing. Credit financing
may include overdraft facilities, term loans, discounting, factoring,
and Euro-currency loans. In addition to the WTDR service provided
by Commerce, background information on Irish and other foreign firms
can be obtained from any of the following sources:
- Foreign Credit
Interchange Bureau, National Association of Credit Management,
475 Park Avenue, South, New York, NY 10003.
- Dun and Bradstreet,
Inc., 99 Church Street, New York, NY 10007.
- Gradon America,
71 West 23rd Street, Suite 1629, New York, NY 10010.
- Major banks-contact
the international section of a large city bank.
- The American
Bureau of Collections, Inc., 1100 Main Street, Buffalo, NY 14209-2356
(a collection bureau with an overseas network).
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Consumer Financing
An important element in retailing
is the use of instalment credit. Most banks offer credit cards that
allow bearers to cash checks at any branch of a participating bank.
Credit cards of most major organisations are accepted by retailers
and businesses. The larger stores in Ireland accept major credit cards
and checks drawn on local banks.
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Banking
The Central Bank of Ireland
was established under the Central Bank Act of 1942. The Central Bank
is charged with the responsibility of managing the country's banking/monetary
system and exchange rates, and controlling credit. In addition, it
acts as adviser and banker to the government. There are two major
banking groups in Ireland, the Bank of Ireland Group and the Allied
Irish Banks. Other prominent banks include the National Irish Bank,
the Northern Bank, and the Ulster Bank, as well as Bank of America,
Chase Bank, and Citibank. In addition, there are numerous firms in
Ireland operating as consumer finance companies, which are referred
to as hire purchase companies or finance houses.
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Export Financing Programs
Several programs exist to
help firms export within the internationally accepted fair trading
practices. The following export financing programs may be of interest
to a U.S. exporter to Ireland:
- Small Business
Administration (SBA) provides financing for the establishment,
operation, or expansion of a small business, including firms engaged
in exporting. Its Export Revolving Line of Credit Guarantee Program
provides pre-export financing for sales and for foreign market
development. The SBA also has a program in cooperation with the
Export-Import Bank (Eximbank) to participate in loans to small
firms.
- Export-Import
Bank facilitates U.S. exports through credit support in the form
of direct loans, commercial guarantees, and insurance.
- Foreign Credit
Insurance Association (FCIA) is a private sector association of
insurance companies. The FCIA acts in conjunction with, and as
an agent for Eximbank, to cover export sale repayment losses due
to political or commercial causes.
- Overseas Private
Investment Corporation (OPIC) assists U.S. private capital investments
and skills in the economic and social progress of developing countries.
Programs include political risk insurance, special insurance coverage
for natural resource projects, leasing, and contractor's risks.
- International
Bank for Reconstruction and Development (IBRD), under the World
Bank Group, promotes development of member countries mainly by
extending conventional loans for specific high-priority projects.
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