The cost base of doing business is one of the key issues which determines Ireland's national and international competitiveness. Through actions already taken in the Jobs Initiative and the recent Budget, the Government has taken steps to address many of the competitiveness challenges facing the Irish economy, including reducing costs, improving access to finance for enterprise and reforming the public sector.
Banking policy falls within the remit of the Minister for Finance. The decisions financial institutions operating in Ireland make on the interest rates they charge to customers are commercial decisions for the institutions concerned. Interest rates are determined by a broad range of factors including ECB base rates, deposit rates, market funding costs, the competitive environment, and an institution's overall funding. Neither I, nor the Minister for Finance, have any statutory function in relation to business interest rate decisions made by individual lending institutions at any particular time.
As the Minister for Finance has indicated previously in the House, it is vital that the banks continue to make credit available to support economic recovery. I am also working on other measures to improve access to credit for viable businesses, particularly SMEs. A targeted Temporary, Partial Credit Guarantee Scheme is currently being progressed as a matter of priority by my Department. Work is nearing completion in relation to selecting an Operator to act as agent for my Department for the practical oversight, management and operation of the scheme, while drafting of the Bill necessary to implement the scheme is being progressed urgently with the Office of the Parliamentary Counsel.
In November 2011, the Government also sanctioned the establishment of a Micro-Finance Loan Fund to generate up to €100 million in additional micro-enterprise lending which will benefit over 5,000 businesses over a ten year period. It is intended to establish the Micro-Finance Loan Fund facility in the first quarter of 2012. The Temporary Partial Credit Guarantee Scheme and the Microfinance Loan Fund will not solve all the issues around access to credit but they will form key components in the suite of initiatives aimed at ensuring the flow of credit to SMEs to sustain employment and create new jobs.
Policy responsibility for upward-only rent reviews comes within the remit of the Minister for Justice and Equality, Deputy Alan Shatter. The Land Conveyancing and Law Reform Act 2009 abolished upward-only rent reviews for all new leases signed on or after 28 February 2010. However, upward-only rent review clauses continue to apply to leases which were entered into prior to that date. Following legal advice, the Government has decided that it is not feasible to proceed with legislation to abolish upward only rent review clauses in existing business leases. However, businesses can make use of the rent review arbitration code, which provides a mechanism to deal with disputes on commercial rents and can help to resolve issues at a lower cost, in considerably less time, and in a less adversarial way for the parties concerned.
NAMA also has a policy guidance for dealing with tenants' difficulties arising from upward-only rent reviews. This provides an opportunity for NAMA to approve rent reductions where it can be shown that rents are in excess of current market levels and a tenant's viability is threatened. The policy also provides for the appointment of an independent valuation of market rent where necessary. NAMA has advised the Minister for Finance that where a tenant is not getting satisfaction in the negotiations with his NAMA landlord, the tenant can contact NAMA directly.