Retail Sector

Dáil Éireann Debate, Thursday - 18 October 2018

Thursday, 18 October 2018

Ceisteanna (9)

Jan O'Sullivan

Ceist:

9. Deputy Jan O'Sullivan asked the Minister for Business, Enterprise and Innovation if her attention has been drawn to reports from retail businesses that banks, which would previously have extended their overdraft facilities at times of the year when such businesses need extra credit owing to cashflow patterns, are now insisting that they take out loans; if she will engage with the banking sector to represent the interests of businesses rather than the interests of banks; and if she will make a statement on the matter. [42700/18]

Freagraí ó Béal (6 píosaí cainte)

Deputy Jan O'Sullivan

I am a member of the cross-party retail support group, which has members from all of the parties present in the Chamber. At our last meeting, we were told by some businesses that whereas previously they would have secured an extension to their overdraft at times of pressure on their cashflow, such as in the lead-up to Christmas, banks are now telling them to take out a loan instead of offering an overdraft facility. I want to make the Minister aware of this issue and find out if there is a way in which she, as a champion of business in the State, can put pressure on the banks to put the interests of businesses ahead of their own interests. Unfortunately, the banks have not learned their lesson from the bank bailout.

Deputy Heather Humphreys

I thank Deputy O'Sullivan for raising this issue. As chair of the retail consultation forum I understand the importance of the retail sector and its crucial role in supporting jobs in every city, town and village in the State. Recent figures from the Central Statistics Office show that more than 300,000 people are employed in the wholesale and retail sector. The retail consultation forum provides a platform for engagement between retail representative bodies, retailers and the public sector on key development issues for the retail sector. To date, the issue that the Deputy has raised, has not been brought to me directly via the forum members or the retail representative bodies.

As Minister for Business, Enterprise and Innovation, I am committed to ensuring an attractive and competitive environment for business, including access to finance for growth.

That is why I have prioritised ongoing structured dialogue with key stakeholders to ensure the needs of business are considered in the execution of national policy and in the development of relevant and appropriate supports. In this context, just two weeks ago, I met the CEOs of the three main banks and I emphasised to them the importance of sustaining the progress being made on improving access to finance and on the need to support businesses strongly at this challenging time.

Recognising that finance is critical to the success of business, regardless of size or sector, providing appropriate and accessible finance to business is one of Government’s top priorities. We have put in place several supports and initiatives to improve access to finance for SMEs, including the Brexit working capital loan scheme, the credit guarantee scheme and supporting Microfinance Ireland. Retail businesses are benefiting from these schemes and initiatives. I am pleased that a number of retail and wholesale businesses have been approved under the new Brexit working capital loan scheme, equating to 20% of approved SMEs by the end of September.

I and my Department will continue to engage with the retail consultation forum to understand the challenges they face.

Deputy Jan O'Sullivan

I thank the Minister for her reply. I will certainly take back the information she has given me and suggest that those businesses should give some information to members of the retail consultation forum. They have presented it as a cashflow issue, so they might not necessarily need a loan, just a facility to carry them over until their cash comes back in after the Christmas period and other times of the year.

Many of us had the opportunity to meet representatives of the credit union movement this morning. Indeed every year they come to talk to us and to various committees. While they want to lend for social housing, which I support fully and which the Central Bank has indicated it would be mindful should happen, a vehicle is needed and the Government must provide it. I understand that if such a vehicle were to be set up to invest in social housing, it would also be a model for investing in small businesses through the credit union movement. Would the Minister be supportive of the credit union movement assisting small businesses?

Deputy Heather Humphreys

As a former employee of the credit union movement, I certainly support any efforts, arrangements, or vehicles whereby the credit union movement is allowed to support businesses. I firmly believe that it can play a very important role in that. To that extent I met one of the members of the Credit Union Managers Association, CUMA, organisation and I have asked the association to put forward its proposals. I will look at them to see how credit unions can support small businesses. They have the expertise, local knowledge and the capital that they can lend, which is very important.

As the Deputy is aware, credit unions are regulated by the Central Bank, but it would be very important to find a vehicle or mechanism for credit unions to support businesses. They form a wonderful organisation and I am satisfied that they have the necessary skill sets to assess and look at providing finance to small businesses, particularly microbusinesses. We have a range of other supports available through the local enterprise office and other agencies.

Deputy Jan O'Sullivan

It is important for the banks to realise that there is competition and that they cannot do whatever they like in their own interests rather than those of their customers, including their business customers. I would be very worried if they are showing signs again of being more arrogant than they should be in how they do business with people.

Deputy Heather Humphreys

I met representatives of the four pillar banks, in particular Ms Francesca McDonagh, CEO of Bank of Ireland, Mr. Bernard Byrne, group CEO of AIB, and Ms Jane Howard, chief executive of Ulster Bank, and we discussed the following topics: the importance of the banks in supporting enterprise resilience in the context of Brexit, access to finance, the relatively high cost of credit in Ireland vis-à-vis other EU countries, and the banks' participation in and promotion of the range of Government schemes to support improved access to finance, such as the Brexit loan working capital loan scheme. We had a very good discussion and it is important that we keep those lines of communication open and that I have the opportunity to bring to the attention of the banks the issues that businesses are telling me about. I will keep that in mind.