Dáil Éireann Debate, Wednesday - 25 January 2023
40. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment the amount of funding that was allocated to the credit guarantee scheme by his Department in 2021, 2022 and to date in 2023, in tabular form; and if he will make a statement on the matter. [3477/23]
Amharc ar fhreagraThe Covid-19 Credit Guarantee Scheme was launched in September 2020 and operated in accordance with the European Commission’s Temporary Framework on state aid rules in response to the Covid-19 emergency. The scheme closed to new lending after 30 June 2022 following the expiration of the Temporary framework. 9,857 loans were drawn under the scheme to a value of €708 million.
Schemes operating under the Credit Guarantee Act, which includes the Covid-19 Credit Guarantee Scheme and the Credit Guarantee Scheme are based on contingent liability. There is no cost to the State unless loans remain unpaid for a specified period of time and the finance provider calls on the guarantee for 80% of the outstanding balance. Departmental funds are allocated to credit guarantee schemes to pay claims to finance providers under the State guarantee in respect of defaulted loans and administration costs incurred by the Strategic Banking Corporation of Ireland (SBCI) in operating the schemes and other costs such as legal services.
Credit Guarantee Schemes Payments
|
Loan Scheme |
2021 |
2022 |
To date 2023 |
|
Credit Guarantee Scheme/Covid Credit Guarantee Scheme |
€2,172,182 |
€4,677,745 |
0 |
|
Ukraine Credit Guarantee Scheme |
0 |
€20,561 |
0 |
To assist the wider business sector with liquidity and to invest in energy efficiency, a new State-backed Ukraine Credit Guarantee Scheme was developed during 2022 and is due to be launched in the coming days. This will provide low-cost working capital to SMEs, primary producers and small mid-caps (businesses with fewer than 500 employees) of up to €1 million, on a six-year term, with no collateral required for loans up to €250,000.
