Dáil Éireann Debate, Thursday - 3 May 2012
152 Deputy Patrick Nulty asked the Minister for Jobs, Enterprise and Innovation if he will provide an update on his plans to implement the credit guarantee scheme to support small and medium enterprises; when the scheme will come into effect; and if he will make a statement on the matter. [22355/12]
Amharc ar fhreagraI published the Credit Guarantee Bill on Tuesday 3rd April, and I will be progressing this legislation through the various stages in the Oireachtas over the coming weeks. In terms of timelines, the Government hopes to enact the legislation by the end of May. Following the enactment of the legislation, it is envisaged that the Scheme will be going live shortly thereafter. A contractor was selected in February to operate the scheme, a Maynooth based company called Capita Asset Services Ltd, following a public tendering process.
The Scheme is intended to address two distinct barriers to lending; inadequacy of collateral (Pillar 1) and inadequacy of understanding of the novelty of a business model, market, sector or technology (Pillar 2). It will be exclusively targeted to address these particular market failures. Commercially viable, well performing micro, small and medium enterprises that have a solid business plan and a defined market for their products or services, thereby demonstrating their ability to repay the loan are the target of the scheme.
This Scheme will support new lending, encourage investment and company growth, save jobs and facilitate the creation of new jobs, and will boost trade. Term loans, other instruments with term loan-like structures, performance bonds and invoice finance will be covered by the Scheme. The minimum permissible loan value will be €10,000 and the maximum will be €1,000,000. Use of the Scheme is focussed on facilitating additional new lending, with refinancing of existing debt explicitly excluded.
The Scheme will facilitate up to €150 million of additional lending per annum. The benefits forecast to arise from this intervention in each year of operation, on the basis of each tranche of €150m of additional lending to SMEs, include:
Over 1,300 jobs created.
Over €25m of exchequer benefits in tax revenues and welfare cost savings.
Participation in the Scheme is open to all lending institutions who are able to satisfy a series of accreditation criteria focused on regulatory status and compliance, relevant SME lending activities, capacity to undertake additional lending and a commitment to behavioural change leading to greater innovation in SME lending. The accreditation process will be managed by the Operator.
