Gerald Nash (Louth, Labour) | Oireachtas source

The Act placed the maximum limit on the value of funds that could be lent to SMEs at €150 million per annum. If we consider that in the context of the €15.6 million, it is fairly limited. We are trying to spread the risk and increase the appetite of lenders so they can get involved in the process. This will achieve that goal. There is much potential to increase lending without a commensurate increase to the risk and exposure for the State. That is why we must get the balance right. We want to make as many resources available to the SME sector as possible but at the same time making sure that the taxpayer is not exposed.

The overall amount of additional lending that can take place will depend on a range of different factors, as well as the number and type of schemes that will be operated under this legislation, the Minister's participation and each counter guarantee scheme. There is €150 million available per annum but the exposure is capped. It is important that we send a message to the taxpayer that there is a limit and exposure would be limited.

These are very significant funds that will be made available to the SME sector and we need to promote this very strongly over the next period. The Irish Small and Medium Enterprises, ISME, association report from late last week indicated that an understanding and appreciation of the credit guarantee scheme is growing, which is useful. Similarly, with Microfinance Ireland there is an understanding of its work and what is available there, which is useful from an SME perspective. This is a demand-led scheme so we cannot at this point measure how many SMEs want to become involved. Nor can we measure precisely the type of demands on the scheme over the next period. We will be promoting this new approach, along with banks and institutions like the SBCI. Departments, Ministers and agencies will promote this because it needs to be promoted. People must have a clear understanding of what this could mean for business and the risks involved. This can work. It has been a long time in genesis but we want to reduce the risk, in so far as we can, to the State while at the same time making as many funds available to the SME sector.