Dáil Éireann Debate, Wednesday - 22 February 2023
56. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the amount of funding allocated for Microfinance Ireland under the Supplementary Estimate for 2023; and if he will make a statement on the matter. [9132/23]
View answerThere have been no funds assigned to Microfinance Ireland for a 2023 Supplementary Estimate.
The Microenterprise Loan Fund, operated by Microfinance Ireland(MFI) assists businesses with fewer than ten employees. It provides much-needed funding to help microenterprises meet payments for stock, working capital requirements and other overhead expenses through the provision of low-cost lending facilities.
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%).
The Strategic Banking Corporation of Ireland (SBCI) and MFI agreed in September 2021 a 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.
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.
