Dáil Éireann Debate, Thursday - 24 January 2013
25. Deputy Sean Fleming asked the Minister for Jobs, Enterprise and Innovation if he is satisfied that the small and medium enterprise sector is accessing the credit it needs; and if he will make a statement on the matter. [3321/13]
View answerI am acutely conscious of the extreme problems which SMEs are experiencing with respect to credit. International surveys show demand in Ireland is largely the same as in other EU countries, but refusal rates are highest in Ireland. The data on new credit from the banks is particularly disappointing. We need a transformation in our banks from the old model based on property and commission earning, to a new one based on genuine relationship banking aligned to the needs of an SME sector seeking to break into new foreign markets.
The Government have set the pillar bank lending targets so that they rise incrementally with expected demand, with targets of €4bn in 2013, increased from €3.5bn in 2012. Both banks met the targets for 2012. To ensure information on the demand side is accurate and up to date, the Department of Finance continues to conduct biannual surveys of SMEs to assess credit demand and loan approval rates.
Work on facilitating access to finance will remain a priority in the context of the forthcoming Action Plan for Jobs 2013. As the Deputy will be aware my Department has recently introduced two targeted schemes to support an additional flow of credit into the economy namely the Microenterprise Loan Fund and the Credit Guarantee Scheme. Other initiatives assisting business in this respect include the Development Capital Fund, Innovation Fund and specialist NPRF funds for the SME sector.
My Department is working closely with the Department of Finance and the Credit Review Office to evaluate evidence on credit availability and to ensure that the amount of credit flowing to the SME sector is maximised to facilitate sustainable job creation and retention.
In October 2012, the Government commissioned a review of the Credit Review Office (CRO), in relation to the current operation, functions and supports provided by the CRO to meet the overall objective of determining whether SMEs are getting the support on bank lending they require. Officials are currently looking at how to implement changes to the CRO regime, in line with the recommendations of the report.
An SME Funding Consultation Committee, chaired by the Department of Finance meets regularly to examine the various issues in relation to SME credit, and to identify further actions that can be taken to address the difficulties. Officials from my Department participate on this Committee, and a work programme for 2013 is currently being finalised.
