Damien English (Meath West, Fine Gael) | Oireachtas source

The amendment is two-pronged. It seeks to have 12 months interest free, which we cannot do as an interest-free payment is not permitted under the rules. It also seeks to apply a cap. I do not have to the breakdown on the number of lenders that participated in schemes previously. I can certainly get that for the Deputy. The intention of having these credit guarantees is to do two things. It is to make credit available quicker and cheaper with less collateral required by the businesses which are under immense pressure. They can spread the cost, which is causing difficulty at the moment, over the next six years to give them a chance of being able to survive. It is important to have that scheme up and running as quickly as we possibly can. It is guaranteed to be at a reduced rate compared with the products available today without the scheme. That is guaranteed in the legislation, as it must be with the framework of the scheme.

We want to attract the maximum number of lenders into this area. We are trying to increase access to finance for our SME community. We believe there is an opportunity under these schemes to attract lenders, such as credit unions, more into the space of making credit available to businesses as well. The 2.5% interest rate cap will probably rule out many potential lenders coming into the scheme. We cannot force the scheme. We will be asking lenders to avail of the scheme and if we put a cap on this that is probably too low in real terms, even though we always like to make money available to businesses as cheaply as we possibly can, we must also be realistic that this would not attract in the lenders. While we can guarantee that there must be a reduction to reflect the State's involvement beyond the guarantee, we need to be realistic that a 2.5% cap would probably prevent some of them coming into the scheme. The credit guarantee has worked in the past and delivered good results.

More than 7,500 people benefited from the last scheme. When you sit down with the business community, which we do on daily basis through all the various forums, we find the interest rate is not the bit they are concerned with, but it is access to the money and the number people in the system who are making the money available. That is what we trying to do here. While we of course want to keep the costs as low as we can, and we will demand that, that is not the biggest issue. They say to us that having a number of lenders that are in a position to loan this money is important to them, as well as quicker access with de-risk. By having the straight guarantee, the banks and lenders will change the profile of the customer they try to lend to, which is what we want.

I also want to flag the role of Microfinance Ireland, which also has products available to smaller companies. This is a good offering and there is an opportunity in some of those schemes to have an interest-free period. This a different scheme and it is targeted at different businesses, but it is worth mentioning and is another part of the offering. This is to strengthen our toolkit to respond to the needs of business and that is why we are trying to get it through the Houses.

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