Dáil Éireann Debate, Tuesday - 31 January 2012
305 Deputy Willie Penrose asked the Minister for Jobs, Enterprise and Innovation if he will outline in detail the funding that will be available from the micro-enterprise fund for small business; the way it will be evaluated and allocated; if an agreement has been reached with the banking sector to provide much needed finance and credit for small businesses; and if he will make a statement on the matter. [5570/12]
Amharc ar fhreagraI am developing a Microfinance Loan Fund to provide loans to the microenterprise sector. It is targeted at start-up, newly established, or growing micro enterprises across all industry sectors, employing not more than 10 people. This Fund will provide loans of up to €25,000 for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.
The proposed delivery structure of the Microfinance Loan Fund is being designed in close consultation with the Department of Finance, and is being progressed as a matter of urgency.
The Government recently approved the allocation of €10 million as seed capital for the Fund. It is anticipated that the Fund will supplement this seed capital by leveraging further funding from private sources, including the banks.
With regard to banks providing credit to small businesses, the initiatives taken by the Minister for Finance in March 2011 to reorganise, recapitalise and deleverage the domestic financial system is the principal response to restore the banks to health and provide credit to business.
The Government imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks were required to sanction lending of at least €3 billion in 2011, €3.5 billion this year and €4 billion in 2013 for new or increased credit facilities to SMEs. Each bank has informed the Department of Finance that they expect to have met their lending targets for 2011.
