Jackie Cahill
Question:155. Deputy Jackie Cahill asked the Tánaiste and Minister for Enterprise, Trade and Employment if he will report on the Covid credit guarantee scheme; and if he will make a statement on the matter. [60794/21]
View answerThursday, 9 December 2021
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The COVID-19 Credit Guarantee Scheme is the largest scheme of its type in the history of the State and makes up to €2 billion in lending available to SMEs. Since its launch in September 2020 it has enabled vital access to loans for the SME sector. As of the 25th November, eight thousand, five hundred and fifty-six loans with a value of over €598 million have been drawn or sanctioned to SME businesses in all parts of the country. Many of these loans have been delivered to those sectors most impacted by the pandemic such as the wholesale and retail sector, accommodation and food services, and construction. These three sectors alone, account for forty-seven percent of the value of loans drawn. Over fifty-seven thousand jobs have been maintained as a result of the Covid-19 Credit Guarantee Scheme.
Loans of up to €1 million are available for up to 5.5 years. Loans under €250,000 do not require any personal guarantees or collateral. The Scheme has an 80 percent guarantee and is based on contingent liability. This means there is no cost to the State unless a participating enterprise is unable to pay back the loan for more than 90 days, whereupon the loan enters a default stage. The finance provider can then call on the guarantee for 80 percent of the outstanding balance.
The Scheme is currently available through three commercial banks, six non-bank lenders and nineteen credit unions thus providing competition in the market and a variety of loan products. This long-term policy goal of diversification adds competition in the market and ensures a wide range of loan products are available throughout the regions.
The Scheme is currently available until 31 December 2021 in line with European Commission’s State Aid Temporary Framework. The Commission recently announced the extension of the Temporary Framework until 30 June 2022 and a legislative amendment to extend the Covid-19 Credit Guarantee Scheme has been included in the Social Welfare Bill 2021, which is currently under scrutiny by the Houses of the Oireachtas.