Dáil Éireann Debate, Tuesday - 10 July 2012
205 Deputy John Lyons asked the Minister for Jobs, Enterprise and Innovation if he has considered using the European Progress Microfinance Fund as a source of funding for youth unemployment initiatives; and if he will make a statement on the matter. [33587/12]
View answerYouth unemployment initiatives are the responsibility of my colleague, the Minister for Education and Science. I am in the process of introducing a Microfinance Loan Fund, which has a significant entrepreneurship focus, for all would-be entrepreneurs including young entrepreneurs who are unemployed. Loans will be made available to start-up, newly established, or growing microenterprises, with viable business propositions, that do not meet the conventional risk criteria applied by banks. The potential viability of the business proposal will be the dominant factor in all credit decisions. However, I believe that the Fund will be of particular benefit to young entrepreneurs, as they do not have the advantage of a favourable credit history and therefore, may be categorised as a high risk by the banks. Loans from the Microfinance Loan Fund will be administered under the remit of the Social Finance Foundation on behalf of the Minister for Jobs, Enterprise and Innovation.
The European Progress Microfinance Facility is a European Investment Fund (EIF) initiative to support entrepreneurship and employment through microfinance activities. Capped guarantees may be provided to eligible intermediaries partially covering their portfolios of micro-loans, or loan facilities may be availed of to increase lending to micro-enterprises. Initial engagement has taken place between the Social Finance Foundation and the EIF in relation to availing of the EU Progress Microfinance Guarantee Facility. Formal application will be made for the EU Progress Microfinance Guarantee Facility following enactment of the legislation, which provides for the establishment of the microfinance lending entity, Microfinance Ireland. A rigorous due diligence process is required to secure EIF accreditation.
