Dáil Éireann Debate, Thursday - 27 September 2012
73. Deputy Terence Flanagan asked the Minister for Finance further to Parliamentary Question No. 64 of 18 July 2012, if he will respond to correspondence (details supplied); and if he will make a statement on the matter. [41064/12]
Amharc ar fhreagraThe issue of access to credit for small businesses is a priority for the Government and in that regard a number of initiatives have been introduced. The restructuring plan for the banking system creates capacity for the two pillar banks, Bank of Ireland and AIB, to provide lending in excess of €30 billion in the next three years. The Government has imposed targets on the two domestic pillar banks for lending to SMEs over the three calendar years 2011 to 2013. Both banks were required to sanction lending, including lending for working capital purposes, 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. Both banks achieved their 2011 targets.
The Credit Review Office (CRO) reviews decisions by the pillar banks to refuse, reduce or withdraw credit facilities (including applications for restructured credit facilities) from €1,000 up to €500,000. The Credit Review Office has to date overturned 60% of the decisions referred to them, supplying €6.9 million of credit, supporting 683 jobs in the SME sector. The Action Plan for Jobs 2012 contains a commitment, to be completed this year, to “assess the Credit Review Office to ensure SMEs are getting the support on bank lending they require.” I understand that work is underway on this process and that my Department expects to receive a report in early November.
The Temporary Partial Credit Guarantee Scheme, a key commitment under the Action Plan for Jobs 2012, will facilitate up to €150 million of additional lending to eligible SMEs per annum. Take-up of the Scheme will be closely monitored. The purpose of the scheme is to encourage additional lending to SMEs, not to substitute for conventional lending that would otherwise have taken place.
The Microenterprise Loan Fund Bill was published on 22 June and my colleague the Minister for Jobs, Enterprise and Innovation is taking the legislation through the Oireachtas at present. The scheme, which is expected to be operational shortly, will facilitate up to €40 million in additional lending to microenterprises over the next five years (an Exchequer allocation of €10 million has already been approved by Government as seed capital for the fund). Furthermore, the Government is in the process of facilitating up to €150 million per annum of additional credit through the Temporary Partial Credit Guarantee Scheme, designed for SMEs which, because of lack of collateral or because of the specialised sector they operate in, face difficulties in accessing bank credit.
On 4 November 2011, the Central Bank published a revised statutory Code of Conduct for Business Lending to Small and Medium Enterprises (the SME Code) setting out new requirements for lenders when dealing with SMEs in, or facing, financial difficulties which came into effect from 1 January 2012. A full review of the SME Code will be undertaken by the Central Bank in 2012.
In addition to these initiatives, and following the meeting between the President of the EIB, Mr. Werner Hoyer and myself and the Minister for Public Enterprise and Reform, officials from my Department and the National Pensions Reserve Fund (NPRF) have been engaging with the European Investment Bank (EIB) on non-traditional forms of EIB financing for Irish SMEs. This includes the EIB providing financing to SMEs via non-bank channels and there have been detailed discussions with the EIB on financing for an SME Fund being developed by the NPRF. I understand that these discussions are progressing satisfactorily.
I also might mention that the Government announced the establishment of the Strategic Investment Fund (SIF) in September 2011. The SIF will channel commercial investment from the National Pensions Reserve Fund (NPRF) towards productive investment in the Irish economy, following appropriate legislative changes to the investment policy of the NPRF. As well as money from the NPRF, the SIF will seek matching commercial investment from private investors and target investment in areas of strategic significance to the future of the Irish economy.
