Dáil Éireann Debate, Wednesday - 2 December 2020
25. Deputy Aodhán Ó Ríordáin asked the Tánaiste and Minister for Enterprise, Trade and Employment the projected number of applicants for the MFI Brexit business loan; the value of loans expected to be issued by the end of 2020; and if he will make a statement on the matter. [40577/20]
View answerThe Microenterprise Loan Fund operated by Microfinance Ireland assists businesses that have less than ten employees and have an annual turnover up to €2 million. It provides much-needed funding to help microenterprises meet payments for stock, working capital requirements and other overhead expenses through the provision of low-cost lending facilities.
Microfinance Ireland provides vital support to microenterprises by filling the lending gap in the market by lending to business that cannot obtain loans from other commercial lenders. It lends to business that do not meet the conventional risk criteria applied by commercial lenders and applies interest rate charges for its lending which are not reflective of its credit risk.
The new Microfinance Ireland (MFI) Brexit Business Loan which was launched on 23 November, will provide up to €25,000 to businesses whose turnover already is or is likely to fall 15% or more or if the business has a short term cashflow need as a result of Brexit. Loans are available for between 6 months and 3 years with an Interest rate of 4.5% available to all micro-enterprises where the application is made through the Local Enterprise Network or referred by a bank or Local Development Committees. The rate for direct applications to Microfinance Ireland is 5.5%.
As this scheme has only been in operation for a week it is not yet possible to determine the potential uptake by year end. There are indications that small businesses in particular are still waiting for a clearer picture of the terms that will apply to the UK’s exit agreement before making their own commitments. Microenterprises have a number of supports available to them through the LEO network and MFI in relation to dealing with the impacts of both COVID-19 and Brexit. Their business decisions to avail of these loans and other supports will depend on the market conditions experienced in the months ahead. For the clients of MFI, it is expected that this loan will be primarily used to avoid supply chain disruption and importations as opposed to exporting companies. MFI will have adequate funding to support micro businesses affected by Brexit as a result of increased allocations of Exchequer funding throughout 2020.
This scheme has been made available as an additional support to business to help reduce the negative impacts of Brexit and will continue to be available into 2021. I can assure the Deputy that officials from my Department will continue to work with MFI to ensure promotion of the Scheme to a wide variety of audiences.
