Skip to main content
Normal View

Credit Availability

Dáil Éireann Debate, Thursday - 14 February 2019

Thursday, 14 February 2019

Questions (70)

Bernard Durkan

Question:

70. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which working capital continues to be made available to the farming and business sectors, with particular reference to smaller enterprises; and if he will make a statement on the matter. [7620/19]

View answer

Written answers

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

In terms of monitoring the working capital and other requirements for SMEs, my Department biannually surveys the demand for credit by SMEs. The latest Department of Finance SME Credit Demand Survey, covering the period April to September 2018, can be found at www.finance.gov.ie. The results of this survey show that working capital/cash flow requirements are provided as the main reason for applying for bank finance with 42% stating this is why they requested bank finance. When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 85% of working capital coming from this source (up 4%) since Sept. ‘17.

A €300 million Brexit Loan Scheme was announced in Budget 2018 and launched at end March 2018. The purpose of the Scheme is to provide short term working capital to assist Irish small businesses adapt and innovate in response to the challenges posed by Brexit. Loans provided under the Scheme are between €25,000 and €1.5 million with a maximum interest rate of 4%, a meaningful reduction compared to the current cost of credit for SMEs. In addition, loans below €500,000 do not require security. The Scheme is offered by the Strategic Banking Corporation of Ireland (SBCI) through participating finance providers, including Bank of Ireland, Ulster Bank and Allied Irish Bank, a key objective of the SBCI is to ensure that SMEs can access low cost flexible loans from a variety of sources. Due to state aid rules, the Scheme is not available to primary producers in the agriculture sector or to the fishing sector; however, it is open to food businesses.

The Microenterprise Loan Fund, administered by Microfinance Ireland, is an additional source of credit that provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing fewer than ten people. Up to the end of Q3 2018, €26.7m in loans have been approved, supporting 4,407 jobs.

The Credit Review Office is another government initiative that helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Review Office supports the appealer in more than 50% of cases.

The Government remains committed to the Farming and SME sector and sees it as the key engine of ongoing economic growth. I can assure the Deputy that my Department, working with other relevant Departments, Bodies and Agencies, such as the Credit Review Office, will continue to advance policies to ensure the availability of both bank and non-bank credit so as to ensure that viable Irish business have sufficient access to finance.

Questions Nos. 71 and 72 answered with Question No. 69.
Top
Share