Ms Adrienne Murray:

I thank Deputy Collins for her positive feedback. We welcome suggestions on reaching target audiences such as through the colleges, incubation centres and credit unions. In some cases we have developed links, for example, with programmes such as LaunchPad, but the innovation and incubation centres are part of our strategy for 2014. Credit unions in particular in urban areas support self-employed people and we have been in contact to say we would welcome applications.

In conjunction with Enterprise Ireland, we have funded some high potential start-ups, HPSUs, that are partially trading, which is to be welcomed. We have linked in with Enterprise Ireland which has been very supportive of us. Different teams are involved in terms of young companies that have attracted innovation funding that are potential exporters, although that is not our direct remit. Nonetheless, if such companies need a small loan for working capital we can assist.

Deputy Collins referred to mentoring and the Forfás report. We would welcome any new initiatives that can support the microfinance model. We look forward to any initiatives or announcements by the Government in that regard.

In terms of bank refusals, we are conscious of the difference between what is classified as a formal decline and an informal decline. To use bank-speak, a formal decline is that the customer provides all their documentation and it goes through the bank’s formal application process, which can take X number of days. An informal decline – we are getting good traction on this – is where a person can go along to their local branch, discuss the project and get a verbal decline. We are happy to accept a verbal or informal decline on a self-certified basis. That is a practical example and we are getting traction in that regard.

In terms of approval rates, we anticipated that it would be in the region of 50% and we are in the region of 45% to 46%. In terms of decline rates, in the first case the applicants have all been declined by the banks, either formally or informally so we are already in a high risk category, but we have a different risk appetite from the banks in that our appetite for risk is higher. The trends in terms of declined applications are based on business models not being sufficiently researched. In some cases the business is in a highly competitive area in which we see business failure every day, sometimes due to saturation in particular sectors in local economies. In other cases, the skills of some entrepreneurs are not relative and they do not have the necessary experience or, ultimately, the business model that is projected does not demonstrate repayment capacity.

We do try to get applicants over the line. It is a sad fact of life but in many cases people already have high levels of debt, both personal and business, and we do not think we would be doing people any favours by putting another loan on them where they already have existing debt. In many cases we will lend to people who have outstanding borrowings, both personal and business, but where they are able to demonstrate that they have arrangements in place with a borrower, be it on interest-only or where a moratorium has been agreed with the lender. In many of the declined applications we have not been able to see proof of that in terms of their outstanding commitments.

I keep coming back to mentoring. In terms of some of the applications that have not got through, we would defer them, go back to the county enterprise boards and say we think there is a good idea and ask them to provide mentoring assistance in a particular area, be it finance, marketing or distribution, and the applicants come back to us at a later stage and we are able to approve them. We refer people back to county enterprise boards to see whether they can refine the application further and sometimes we can help in terms of phased drawdown. If they reach certain milestones, we can review the progress of the business and then perhaps release a bit more of the loan. We are conscious of being solution focused.