Vol. 450 No. 7
12 Mr. Callely asked the Minister for Enterprise and Employment the measures, if any, he intends to introduce to support the recommendations of the task force on small businesses that the Government should seek to encourage the main banks to commit additional resources to lower interest rate schemes in view of predictions of interest rate increases in 1995; and if he will make a statement on the matter. [5600/95]
It is my intention to introduce at an early date a new subsidised loan fund for small businesses under the SME initiative of the European Union. The draft operational programme responding to this initiative has been lodged in Brussels since November 1994 and I would hope that the relevant negotiations on the Programme can be concluded in the near future.
The banking sector is becoming increasingly aware of the small business borrower and I welcome the many positive developments in small business banking since the task force. It is fair to say that the small business expansion loan scheme introduced in 1994 was very successful in making low cost, long term, fixed interest rate funds available for small business investment. As well as creating and maintaining nearly 5,000 jobs, this £100 million loan fund generated a strong competitive response from most financial institutions concerned with small business. I expect this trend to continue and perhaps be accelerated by the new scheme which will, when approved by the Commission, be put to competitive tender among the banks to get the best deal for small business in the current economic environment. I see funding such as this being delivered in partnership between the Exchequer, the EU and the banks. Banks have shown a readiness to commit resources to such a partnership arrangement as well as to meet the small business agenda.
