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Dáil Éireann debate -
Wednesday, 1 Feb 1978

Vol. 303 No. 2

Financial Resolutions, 1978: Financial Statement, Budget, 1978. - Investment finance for small firms

If small firms are to expand quickly they must have access to the necessary investment finance. The European Investment Bank is an appropriate source of long-term development funds. It has lent over £145 million in this country, mainly for the public capital programme, since our accession to the European Communities. Strong representations have been made that small firms, in particular, are inhibited from availing themselves of the bank's facilities by the risk inherent in borrowing foreign currencies.
Exchange rate changes can impose considerable additional costs which cannot be foreseen when a loan is taken out. I have decided, in principle, therefore, that the Exchequer should assume the exchange risk liability on borrowing by the Industrial Credit Company from the European Investment Bank for on-lending to small firms in the manufacturing sector. I have also arranged that the Industrial Credit Company's margin for administration expenses in relation to this scheme will be at a specially low rate. I hope the way will now be clear for an expansion of the bank's lending operations in Ireland. I shall be making a more detailed announcement as soon as the necessary consultations with the bank have been completed.
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