Dáil Éireann Debate, Thursday - 26 April 2012
15 Deputy Pádraig Mac Lochlainn asked the Minister for Jobs, Enterprise and Innovation the steps being taken to ensure that small and medium enterprises can benefit from the EU progress micro enterprise fund. [20894/12]
Amharc ar fhreagra35 Deputy Pádraig Mac Lochlainn asked the Minister for Jobs, Enterprise and Innovation when the first loans to businesses will be granted through the new proposed micro enterprise scheme. [20893/12]
Amharc ar fhreagraI propose to take Questions Nos. 15 and 35 together.
Work on the Microfinance Loan Fund is being progressed rapidly to achieve an early launch. The Fund will stimulate lending to sustainable microenterprises and is targeted at start-up, newly established, or growing micro enterprises across all industry sectors, employing not more than 10 people. It will provide loans of up to €25,000 for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.
Heads of a Bill to give effect to the Microfinance Fund have been agreed by Government and the Bill is due for publication in Quarter 2 2012. The Fund will be managed and controlled by the Social Finance Foundation (SFF).
Funding of €10m has been allocated as seed capital for the Fund in the Department of Jobs, Enterprise and Innovation's Vote for 2012. It is anticipated that this €10m will be supplemented by leveraging further funding from private sources, including the banks.
The €10m allocation, supplemented by a further €15m raised from private sources over the short to medium term should generate €40m or so in increased lending to microenterprises, creating up to 4,000 jobs over a 5 year period. This is based on an estimated €9 million of loan demand annually.
Extrapolating further, the same model should generate between €90m-€100m in additional lending, finance 5,500 microenterprise loans and generate some 8,000 jobs over a 10 year period.
Initial engagement has taken place with the EIF in relation to the EU Progress Microfinance Guarantee Facility. A rigorous due diligence process is required to secure EIF accreditation which will continue in Quarter 2. Following EIF approval of the guarantee facility, and subject to completion of the statutory process it is anticipated that the Loan Fund will commence lending in late Summer.
