Dáil Éireann Debate, Tuesday - 17 December 2013
277. Deputy Terence Flanagan asked the Minister for Jobs, Enterprise and Innovation the non-funded moneys that are available to help small businesses; and if he will make a statement on the matter. [53760/13]
Amharc ar fhreagraI understand from the Deputy's question he is referring to the Schemes launched by my Department, to support an additional flow of credit into the economy by filling gaps where specific market failures exist – the SME Credit Guarantee Scheme and the Microenterprise Loan Fund. The SME Credit Guarantee Scheme has been live since 24th October 2012 and is intended to address market failure affecting commercially viable businesses. It provides a 75% State guarantee to banks against losses on qualifying loans to firms with growth and job creation potential. The Scheme is intended to facilitate up to €150 million of additional lending to eligible SMEs per annum, over the three year cycle.
Target groups are commercially viable SMEs, i.e. well performing companies that have a solid business plan and a defined market for their products or services, thereby demonstrating their ability to repay the loan, but that do not secure credit facilities due to the following two market failures:
1) Insufficient collateral for the additional facilities, or,
2) Growth/expansionary SMEs which due to their sectors, markets or business model are perceived as a higher risk under current credit risk evaluation practices.
To be eligible for the guarantee, businesses must have applied for credit, and must have been refused for either of these two reasons. Ulster Bank, AIB and Bank of Ireland are participating in the Scheme.
The second initiative is the Microenterprise Loan Fund which was established by Government to improve access to credit for entrepreneurs and micro-enterprises and to facilitate the growth and expansion of viable businesses from all industry sectors which have been refused access to credit by banks.
Microfinance Ireland opened for business on 1st October 2012 and provides support in the form of loans for up to €25,000 to start-up, newly established, or growing microenterprises employing less than 10 people, with viable business propositions, that do not meet the conventional risk criteria applied by banks. The potential viability of the business proposal will be the dominant factor in all credit decisions. To be eligible for a loan, persons must possess a business plan, must have a commercially viable proposal, must confirm that they have been refused credit from a bank, and must have the capacity to repay the loan. It is intended that the Fund will generate over €90m in loan expenditure over a 10 year period.
My Department publishes quarterly progress reports on the Microenterprise Loan Fund and the SME Credit Guarantee Scheme on my Department’s website www.enterprise.gov.ie. The progress reports detailing the analysis and performance of both Schemes for the quarterly period ending 30 September 2013 are available on my Department’s website. For more information on the Microenterprise Loan Fund please also see www.microfinanceireland.ie.
