Dáil Éireann díospóireacht -
Wednesday, 15 Oct 1997

Vol. 481 No. 5

Written Answers - Soft Loan Scheme.

Thomas P. Broughan

Ceist:

56 Mr. Broughan asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans, if any, she has to request the banks to introduce a third soft loan scheme for small business in view of the fact that this measure was called for recently by the Irish Small and Medium Enterprises Association. [16727/97]

Tánaiste and Minister for Enterprise, Trade and Employment (Miss Harney)

I am aware of ISME's recent call for a third soft interest loan scheme. I would like to make it clear that previous subsidised loan schemes were not solely funded by the banking sector. On the contrary, previous schemes required substantial Exchequer resources.

The small business expansion loan scheme and the access to finance scheme have provided over £300 million in subsidised long-term fixed interest loans to small businesses at subsidised rates of 6.75 per cent and 6.5 per cent respectively over recent years. Almost 2,000 small businesses continue to benefit from these schemes.

The most recent of these schemes, the access to finance scheme, was introduced as a partnership between the European Commission, the participating banks — Bank of Ireland, AIB, Ulster Bank and National Irish Bank — and the Exchequer whereby each partner contributes to the cost of providing seven year loans at a subsidised and fixed interest rate to the small business sector. Almost 50 per cent of the cost of the scheme is carried by the participating banks; the other half is jointly funded by the European Commission and the national Exchequer. No further EU funding is available at this time to fund a further scheme.

The programme for Government, an Action Programme for the Millennium, commits this Government to making life easier for small business. The nature of the financial environment faced by business is a vitally important element of the overall business environment. My Department, with Forbairt and Forfás, is examining a range of options which could improve the financial environment for start-up and existing businesses. In addition, a review of the access to finance scheme, as part of a wider review of the operational programme for small business, has been commissioned and is expected to be completed shortly. On completion of these studies I will consider whether a new soft loan scheme or other instruments are most appropriate.