Local banks must increase lending to viable local businesses at reasonable terms, according to Stormont Finance Minister, Sammy Wilson.

The Minister was speaking after the second meeting of the Executive's Cross Sector Advisory Forum's Banking Finance and Lending sub-group at Stormont, which brings together representatives from the local financial sector.

The Minister also referred to discussions on the Irish government's proposed National Asset Management Agency (NAMA) and to the overall housing market and said: "I informed sub-group members that the latest data available suggests that the local housing market is showing signs of stabilising.

"Whilst this is good news there is no doubt that the local housing market continues to be in a fragile state."

Speaking after the meeting Mr Wilson said: "A fundamental pre-requisite to a vibrant economy is a banking sector lending at reasonable terms to viable businesses.

"If this is not in place, the Northern Ireland economy will take much longer to emerge from the current recession.

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"In recent weeks I have heard reports of banks refusing to lend, or offering loans on unreasonable terms, to the type of small local firms that are the lifeblood of our economy.

"At this sub-group meeting, I impressed upon the banks their responsibilities in this area and asked them to properly support our local businesses by providing finance at reasonable terms. Without reasonable lending practices from our banking sector, the recession will be longer and deeper in Northern Ireland than would otherwise be the case," he said.

The Minister used the meeting to update sub-group members on the latest developments relating to the Irish government's proposed National Asset Management Agency (NAMA).

He told members that Northern Ireland would have a direct input to the NAMA process, which would help safeguard our interests.

He also expressed concern over the relatively low take-up of the UK government and European Investment Bank schemes designed to increase business lending.

He said: "I am also very concerned about the low take up of bank lending schemes. These are mainly designed to encourage lending to small and medium sized enterprises – exactly the type of local business that is currently struggling through the current economic downturn.

"That is why I have asked the local banks to better promote these initiatives within the local economy," he continued.

Lending to the community and social sector was also discussed with the Minister recognising the need for continued funding of local businesses involved in progressing projects within this sector.

The cross sector advisory forum is an informal ad hoc advisory group which meet under the chair of the First Minister and Deputy First Minister to review the local impact of the current economic downturn on local people and businesses.

The purpose of the group is to make recommendations for addressing problems arising from the economic crisis, although the group is completely informal and advisory.

(BMcC/KMcA)