Wednesday, 16 May 2018

Questions (73, 74)

Brendan Smith

Question:

73. Deputy Brendan Smith asked the Minister for Finance if he is satisfied with the level of lending to small and medium enterprises by each of the banks; if his attention has been drawn to the widespread concerns in relation to the difficulties encountered by such enterprises in securing finance; and if he will make a statement on the matter. [21660/18]

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Brendan Smith

Question:

74. Deputy Brendan Smith asked the Minister for Finance if he is satisfied with the level of lending by each of the banks to the farming sector; if his attention has been drawn to widespread concerns of many farmers in securing funding; and if he will make a statement on the matter. [21661/18]

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Written answers (Question to Finance)

I propose to take Questions Nos. 73 and 74 together.

Supporting the availability of finance for SMEs is a cornerstone element of Government policy in our efforts to strengthen the economy and create jobs.

My Department commissions biannual surveys to ascertain the demand for credit by SMEs. This survey series, most recently conducted by Fitzpatrick Consultants and Behaviour and Attitudes on behalf of my Department, is the most comprehensive survey of SME credit demand in Ireland, covering 1,500 respondents and involving over 6,000 direct telephone calls to SMEs. SMEs of all sizes, trading in all sectors, excluding property development and speculative activities, are included. The survey covers demand for credit from both bank and non-bank sources.

I would draw the Deputy's attention to the most recently published Department of Finance SME Credit Demand Survey, covering the period April to September 2017, which can be found at www.finance.gov.ie. The results of this survey shows that, when pending applications are excluded, 84% of credit applications to banks were approved or partially approved. Purchases, replacement or lease of new vehicle/equipment is now provided as the main reason for applying for bank finance with 29% stating this is why they requested bank finance. The survey also showed continued positive trends in terms of trading performance, profitability and employment.

Government is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. In this regard the Government has developed a number of initiatives to ensure that the supply of credit in the market is sufficient to meet the existing and future funding needs of SMEs. It should also be noted that the SBCI have reported that, as of year-end 2017, 24% of their loans (by value) were to SMEs operating in the agriculture sector.

In addition, to address the challenges posed to SMEs by Brexit, last year the Government announced a Brexit Loan Scheme. This provides affordable working capital financing to SMEs and small mid-caps that can demonstrate that they are either currently impacted by Brexit or will be in the future. The Scheme is operating from March 2018 to March 2020 and is delivered by the Strategic Banking Corporation of Ireland through commercial lenders and will serve to get much needed working capital into Irish businesses. The Scheme has made €300 million available to businesses of up to 499 employees, and will be open to both clients of State Agencies and businesses with no relationship with State Agencies.

All viable SMEs 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 and the Government remains committed to the SME sector, as reflected in the Programme for a Partnership Government. Consequently, my Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit to viable SMEs including those in the farming community.