Dáil Éireann Debate, Tuesday - 3 March 2015
249. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation in view of the recent extension of the credit guarantee scheme to allow businesses, whose banks are exiting the Irish market, avail of this scheme, if he will include businesses whose banks are remaining in the Irish market but selling the businesses loans to external investment funds; and if he will make a statement on the matter. [9048/15]
View answerThe SME Credit Guarantee Scheme (CGS) was introduced to encourage additional lending to SMEs and not as a substitute for conventional lending that would otherwise have taken place.
A review of the CGS was undertaken and laid before the Oireachtas in July 2014.
As a result of the review of the CGS and on foot of immediate concerns raised by the Credit Review Office, Business Representative Organisations and the banks, I decided to take urgent action to assist SMEs whose banks have left or are leaving the Irish SME lending market. A new CGS 2015 has now been made in accordance with the terms of the Credit Guarantee Act 2012 which will allow guarantees for refinancing loans where an SME's bank has exited or is exiting the Irish SME market. This new Scheme will also increase the maximum length of guarantees under the CGS from 3 years to 7 years.
To bring this Scheme into operation there are a number of steps to conclude with the participating banks including certification, approval and legal agreements. It is hoped that the new Scheme will be operational in the very near future.
In addition, my Department is currently working on amending the primary legislation and once this is completed I will introduce a new CGS, which will include the following improvements: a wider range of financial products to be covered not just traditional credit products, an increase in the level of guarantee on individual loans from 75% to the maximum permissible under State Aid rules of 80%, an increase in the portfolio cap and the removal of the annual portfolio cap.
My Department also continues to monitor market failures in this area and will take action as appropriate when a complete assessment of the situation has been undertaken.
