Dáil Éireann Debate, Wednesday - 20 November 2013
73. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects credit to become more available to the smaller indigenous business sector; and if he will make a statement on the matter. [49798/13]
View answerFacilitating 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 Government has imposed SME lending targets on AIB and Bank of Ireland 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 in 2012 and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks achieved their 2011 and 2012 targets.
AIB and Bank of Ireland are expected to lend to viable businesses both for investment and working capital purposes. The Credit Review Office is available to assist businesses which have been refused credit. The recent CRO report shows that the Credit Review Office upheld the credit appeal in 150 cases or 55% of cases decided. The upheld appeals have resulted in €18.5 million in credit being made available to SMEs and farms, protecting 1,521 jobs. In the recent Budget, I increased the CRO appeals threshold from €500,000 to €3 million and I would strongly encourage SMEs refused credit to seek a review by the Office.
The Government has taken a number of actions to improve the situation in relation to credit availability to SMEs. The range of credit options available to SMEs now include the Microenterprise Loan scheme which can facilitate up to €40million in additional lending to microenterprises over the next five years. In addition, the Credit Guarantee Scheme is designed for SMEs who, because of lack of collateral or because of the specialised sector they operate in, face difficulties in accessing bank credit.
It is vital that the banks continue to make credit available to support economic recovery. However, it is not in the interest of the banks, businesses or the economy for finance to be provided unless the business is viable and has the capacity to meet the interest payments and repay the sum borrowed.
More generally, small businesses can benefit from support, guidance and advice provided at local level through the network of County Enterprise Boards which are currently being transformed into Local Enterprise Offices with closer links to businesses in their local area.
2014 will see the introduction of a new training programme for SMEs, designed to enhance the financial and business planning capabilities of participants and provide expert mentoring support. Launching initially on a pilot basis involving 1,000 businesses, the 2-day programme aims to equip SMEs with the necessary tools to improve their ability to secure business financing.
A full suite of developmental business supports, totalling approximately €2bn, is available from State bodies and agencies. The Government is developing a comprehensive communication strategy to increase awareness of these supports. This strategy will encompass the revised Credit Guarantee Scheme with a view to increasing awareness amongst SMEs.
Separately, as the Deputy is aware, the Taoiseach mentioned in this House last week that he had held discussions with Chancellor Merkel. Germany is keen to help and specifically to find ways to reinforce Ireland’s economic recovery by improving funding mechanisms for the real economy, including access to finance for Irish SMEs. The German Government has asked KfW, the German development bank, to work with the German and Irish authorities swiftly, in order to deliver on this initiative at the earliest possible date.
