Supporting the availability of working capital for SMEs is a significant element of Government policy in our efforts to rebuild the economy and bring back jobs. Government is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. In this regard the Government has developed a number of initiatives to ensure that the supply of credit in the market is sufficient to meet the existing and future working capital needs of SMEs.
In terms of monitoring the working capital requirements for SMEs, my Department commissions biannual surveys to ascertain the demand for credit by SMEs. I would draw the Deputy's attention to the Department of Finance SME Credit Demand Survey just published, covering the period April to October 2017, which can be found at www.finance.gov.ie .
The results of this survey show that, when pending applications are excluded, 88% of credit applications to banks were approved or partially approved. Working capital/cash flow requirements are provided as the main reason for applying for bank finance with 38% stating this is why they requested bank finance. When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 81% of working capital coming from this source (up 8% since Sept. ‘16).
A key objective of the Strategic Banking Corporation of Ireland (SBCI) is to ensure that SMEs can access low cost flexible loans from a variety of sources. The SBCI channels its funds through lending partners known as on-lenders. The SBCI currently has three bank on-lending partners and four non-bank on-lending partners. To the end of December 2017, the SBCI has supported loans totalling €925 million to 22,928 Irish SMEs employing 119,533 people and working capital made up over 11 percent of lending issued.
The Microenterprise Loan Fund, administered by Microfinance Ireland, is an additional source of credit that provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing few than ten people. Up to the end of Q3 2017, €21m in loans have been approved, supporting 3,336 jobs.
The Credit Review Office is another government initiative that helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Review Office overturns more than 50% of lenders decisions in the appeals it receives.
The Government remains committed to the SME sector and sees it as the key engine of ongoing economic growth. I can assure the Deputy that my Department, working with other relevant Departments, Bodies and Agencies, such as the Credit Review Office, will continue to advance policies to ensure the availability of both bank and non-bank credit so as to ensure that viable Irish SMEs have sufficient access to finance for working capital.