Sandra McLellan
Ceist:44 Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation the anticipated take up of the new partial loan guarantee scheme. [20897/12]
Amharc ar fhreagraThursday, 26 April 2012
Ceisteanna (45)
Freagraí scríofa
The Temporary Partial Credit Guarantee Scheme, the legislative details of which were published on 3rd April, will have the capacity to facilitate up to €150 million of additional lending to SMEs per annum through the Scheme.
Calculations on the volume of additional SME borrowing proposals which would be supported by the Temporary Partial Credit Guarantee Scheme, and estimations of take up are based on:
1. Irish Central Bank gross new SME lending data and,
2. Consultation with SME representative bodies and the Enterprise Development Agencies.
In addition, we recognise that there will be a cohort of discouraged borrowers who may be supported by the Scheme. Essentially these are businesses which have not applied for finance as they believed that any application would be rejected. They may also have engaged in informal discussions about the possibility of borrowing but chose not to pursue an application.
The annual value of the potential demand from this cohort of discouraged borrowers is by definition difficult to assess. It is also anticipated that the introduction of the Scheme may result in an initial surge of pent-up demand from previously discouraged borrowers.
At this stage an average loan value of €80,000 is assumed, with an estimated 1,875 loans per annum provided to micro, small and medium enterprises. These loans will be used for various purposes such as improving cashflow — one of the main constraints on growth by smaller businesses, — developing new products and markets, and expanding activities, thus assisting both job maintenance and creation.
Performance and take up will be closely monitored by the Operator on my behalf, and the Scheme will be subject to review by my Department after the first year.