Dáil Éireann Debate, Tuesday - 21 May 2013
301. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which the borrowing requirements of small and medium enterprises in the manufacturing, service or retail sectors have been met by the borrowing institutions in each of the past three years to date; whether an improvement in likely in this regard; and if he will make a statement on the matter. [24396/13]
View answerAs the Deputy is aware, the Government has imposed SME lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Each bank was required to sanction lending of at least €3 billion in 2011, €3.5 billion last year and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks have achieved their 2011 and 2012 targets. The pillar banks are expected to lend to viable businesses in all sectors of the economy, including the manufacturing, service and retail sectors, and to address the needs of SMEs in financial difficulty. The Credit Review Office is available to assist businesses which have been refused credit. The Credit Review Office is currently overturning 55% of the refusal decisions referred to them and anyone who has been refused credit by the banks should avail of the services of the Office.
Access to finance for SMEs is a key aspect of the Action Plan for Jobs 2013. It is the Government’s vision that all viable businesses operating in Ireland should have the opportunity to access sufficient finance to meet their enterprise needs in a manner that supports growth and employment in the economy.
The SME State Bodies Group was established in 2012 to both develop key policy initiatives to support SME access to credit and other forms of finance, and to ensure their implementation. It has continued in 2013 to engage intensively in proactively addressing issues associated with SME funding and financing in conjunction with the relevant stakeholders through the SME Funding Consultation Committee. My officials also meet frequently with additional stakeholders who wish to contribute to policy development in relation to access to finance.
The Government has taken a number of actions, particularly where SMEs have been refused credit, to improve the situation in relation to credit availability to SMEs.
The Temporary Partial Credit Guarantee scheme addresses the situation where the SME is outside the risk appetite of the banks. This can arise because the SME’s lack of collateral or the banks’ lack of understanding of the business model, the market, the sector or the technology. The three main SME lenders are all participating in the Guarantee scheme.
The Microenterprise Loan Fund Scheme will provide loans of up to €25k to start-up, newly established, or growing microenterprises employing less than 10 people, who have commercially viable proposals that do not meet the conventional risk criteria applied by banks.
