asked the Minister for Industry and Commerce if he will improve the export credit finance scheme for capital goods; and if he considers that Irish exporters of capital goods must be able to offer credit facilities which are, at least, competitive with those offered by countries such as Britain and France.
Ceisteanna—Questions. Oral Answers. - Credit Finance Scheme.
10.
As the Deputy is probably aware from a recent announcement, new arrangements have been authorised for the provision of credit on concessionary terms for exports of capital goods. The main feature of the new arrangements is the decision to provide a subsidy from public funds. Up to this the banks have been providing credit at a preferential rate of interest, without State subvention, but limited to 1 per cent of their resources. The new arrangement providing for subvention by the State will enable the banks to provide credit at a preferential rate without a ceiling on total lending. The aim of both the original scheme and the revised scheme was and is to enable Irish exporters of capital goods to offer credit facilities, competitive in general with facilities offered by their competitors.
(Dublin Central): Will the amounts given by the banks be underwritten by the State or will they give them on their own? It is all right to say that the banks are encouraged to give credit but it is not easy to get it from banks without a guarantee.
The difficulty hitherto was that the banks were using up to 1 per cent of their resources to provide export credit at a lower rate than the commercial rate but they were doing it without State subvention and naturally they were not anxious that it should be a big figure. Since there is a State subvention they no longer have that inhibition on them. It is a subsidy on the interest rate from the State and I think it will end the circumstances where such credit was difficult to get.
11.
asked the Minister for Industry and Commerce if he is aware that certain exports to South African countries are causing difficulties with producing firms because the letter of credit opened may not realise its cash potential for periods up to and exceeding six months.
I am not so aware.