Dáil Éireann Debate, Wednesday - 15 June 2016
223. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation if she provides adequate working capital to the small and medium business sector; and if she will make a statement on the matter. [16315/16]
View answerWorking capital is the lifeblood of SMEs and has been a central focus of Government for many years. Over the last five years the Government has worked tirelessly to ensure that the access of SMEs to an appropriate supply of financing from both bank and non-bank sources is improved and that all businesses have access to appropriate sources of finance to grow develop and expand. A number of key policy and legislative initiatives were developed and delivered since March 2011 with some being reviewed and amended as necessary, and these may be grouped as follows:
Credit Guarantees
- The Credit Guarantee Acts 2012 - 2016, and Schemes made thereunder, have resulted in encouragement of bank lending to Irish SMEs to both create new jobs and protect existing ones. To date approx. €50 million of loans have been sanctioned in more than 300 facilities, and some 2200 jobs were created/maintained;
- New Schemes are currently being drafted to extend the remit of credit guarantees (covering expanded forms of lending, and greater risk sharing), and introduce new counter guarantees to enhance the provision of both State and EU-sourced finance for Irish SMEs;
Microfinance Ireland (MFI)
- The Microenterprise Loan Fund Act, 2012 established MFI to provide loans of up to €25,000 to Irish micro-enterprises. To date approx. €13 million was been loaned to 870 firms, with more than 2000 jobs being created/maintained.
- The operation of MFI was reviewed in 2015, and a number of changes were made to ease access to loans primarily, via the removal of the previous prerequisite of a bank loan rejection. The legislative changes have resulted in a substantial increase in the activities both nationally and regionally in the last year and a half.
Strategic Banking Corporation of Ireland (SBCI)
- The Strategic Banking Corporation of Ireland Act 2014 established the SBCI, and tasked it to provide up to €800m of funds for Irish SMEs previously over reliant on bank financing. This tranche of funding has now been fully committed to business.
Prompt Payments Code (PPC)
- In May 2015, the Government launched the PPC to encourage and promote best practice between businesses and suppliers and improve cash flow for businesses and, ultimately, drive a change in the payment culture in Ireland.
Credit Review Office
- The Credit Review Office continues to review applications for credit made by SMEs or Farm borrowers with viable business propositions who have had an application for credit of up to €3 million declined or reduced by Bank of Ireland, Allied Irish Bank or Ulster Bank.
- The Credit Review Office also examines cases where borrowers feel that the terms and conditions of their existing loans, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment.
My Department Officials continue to work with other Departmental and Agency officials through the State Bodies Group chaired by the Department of Finance to ensure appropriate financing options including working capital are available to SMEs, in line with commitments in the Action Plan for Jobs process.
The Government will continuously monitor the availability of working capital for our SMEs to ensure that our SMEs are well positioned to grow further and to create jobs.
