Dáil Éireann Debate, Thursday - 2 February 2023
174. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the amount of funding allocated to eSPSV business loan in 2021, 2022, and to date in 2023, in tabular form; and if he will make a statement on the matter. [5373/23]
View answer182. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the capital, current and total 2023 budget allocation for the Covid-19 business loan phase 2 and Covid-19 loan scheme, in tabular form; and if he will make a statement on the matter. [5382/23]
View answer186. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the capital, current and total 2023 budget allocation for the microenterprise loan fund, in tabular form; and if he will make a statement on the matter. [5386/23]
View answerI propose to take Questions Nos. 174, 182 and 186 together.
There is a 2023 Budget Capital allocation of one thousand euro for the Microenterprise Loan Fund in the Department of Enterprise, Trade and Employment Vote, as set out in the following table:
|
Microenterprise loan Fund |
2023 |
|
Capital |
€1,000 |
|
Current |
Nil |
|
Total |
€1,000 |
There is no 2023 Budget allocation for the Microfinance Ireland (MFI) Covid-19 business loan phase 2 and MFI Covid-19 loan scheme in the Department of Enterprise, Trade and Employment Vote, as set out in the following table:
|
MFI Covid-19 business loan phase 2 and Covid-19 loan scheme |
2023 |
|
Capital |
Nil |
|
Current |
Nil |
|
Total |
Nil |
There is no 2021, 2022 or 2023 Budget allocation for the MFI eSPSV business loan scheme in the Department of Enterprise, Trade and Employment Vote, as set out in the following table
|
eSPSV business loan |
2021 |
2022 |
To date in 2023 |
|
Capital |
Nil |
Nil |
Nil |
|
Current |
Nil |
Nil |
Nil |
|
Total |
Nil |
Nil |
Nil |
The Microenterprise Loan Fund, operated by Microfinance Ireland (MFI) assists microenterprises, businesses with fewer than ten employees and/or turnover less than €2 million, that are not able to access lending from conventional sources. It provides much-needed funding to help microenterprises meet payments for stock, working capital requirements and other overhead expenses through the provision of lending facilities at attractive terms and conditions, that would otherwise not be available to them.
In addition to its lending services, MFI provides post approval mentoring services free of charge to its borrowers. The mentoring services are delivered through the Local Enterprise Office Network.
Microfinance Ireland provides vital support to microenterprises by filling the lending gap in the market by lending to business that cannot obtain loans from other commercial lenders. It provides loans of €2,000 up to €25,000 to businesses that do not meet the conventional risk criteria applied by commercial lenders and applies interest rate charges for its lending which are not reflective of its credit risk.
The loan term is typically three years for working capital purposes and can be extended to five years for capital expenditures. Interest rates range from between 4.5% for clients of Local Enterprise Offices and other partners to 5.5% for direct applications. There is wide regional spread of loans across the country with 81% of loans approved in 2022 to microenterprises outside Dublin.
The dominant sectors availing of loans from MFI have been the wholesale and retail sector (21%), accommodation and food services (11%), manufacturing (10%) and construction (9%). From the 1st of Oct 2012 to 31st December 2022, the Fund approved loans to 4,635 micro-enterprises for a total value of €76.9million. These funds supported over 10,000 jobs.
MFI, in consultation with the Department of Enterprise, Trade and Employment, introduced its COVID-19 Business Loan as one of the first supports available to business in response to the pandemic. Loans of up to €50,000 were initially made available from March 2020 up to July 2020 under phase 1 of the scheme at reduced interest rates. Phase 2 of the scheme was launched at the end of August 2020. Loans under phase 2 of the scheme continued to be available at reduced interest rates with an additional 6-month interest rebate. Maximum loan amounts were €25,000 in line with MFI’s standard loan portfolio. There was a total of 1,177 MFI Covid loans sanctioned to the value of €27.5 million. This scheme ceased on 31st December 2022.
The eSPSV Business Loan supports small business owners with a Small Public Service Vehicle (SPSV) that are unable to secure finance from Banks and Asset Finance providers and are availing of the government’s eSPSV Grant Scheme to replace their vehicle with a more sustainable model (electric/hybrid). This scheme ceased 31st December 2022.
The Strategic Banking Corporation of Ireland (SBCI) and MFI agreed in September 2021 a new partnership enhancing the availability of lower-cost MFI loans for Irish microenterprises. The SBCI has committed €30 million to MFI which significantly increases MFI’s lending capacity and ability to support more micro enterprises. The lower cost of the SBCI funding will allow MFI to offer lower rates on its Start Up, Cashflow and Business Expansion loans.
