Martin Kenny (Sligo-Leitrim, Sinn Fein) | Oireachtas source

I thank the delegates for their presentations. One thing that strikes me immediately about Microfinance Ireland is the fact that sums of between €2,000 and €25,000 are available. A figure of €25,000 seems very small and to be a very low threshold because many people in starting a business would need three times that figure to get it off the ground. As three times the sum of €25,000 is about twice the average industrial wage, it is not an awful lot of money. Why has the threshold been set so low? Is there a solid reason for it?

It is clear that the cost of creating a job has proved to be very low in the model with which Microfinance Ireland is working. It is not the case that people are receiving grants. They are actually getting loans that they will pay back. Forty-five per cent is the level at which Microfinance Ireland supports loans. A total of 55% of applicants do not receive a loan. Even if the figure was twice that percentage, it is my experience that people do not fail, rather it is businesses that fail. When a business fails, the person concerned learns a lesson from it. He or she often comes back a second or third time and the business may fail a second or third time, but eventually the person who perseveres will succeed. On the level of funding about which Microfinance Ireland is talking, we are all conscious of IDA Ireland, foreign direct investment and the huge amounts of money the State has put into creating 20 or 1,000 jobs somewhere. A few years ago we heard that the cost per job created through foreign direct investment was €1 million, yet in this instance we have a tiny amount to create one job in rural areas in businesses that have the most potential to do well and trade. A total of 82% of businesses are in the sector in which companies have between one and three employees. As they are usually flexible and will work with the community around them, they have greater potential to sustain employment into the future.

On the amount of money in Microfinance Ireland's fund, the total value of loans approved in a six year period comes to €26 million. There was also mention of 1% being the rate. Is that the standard rate, or does it vary much? On the amount of money in the fund being higher, the rate being kept at that level and Microfinance Ireland having the ability to offer higher loans, even if the failure rate was higher, the cost per job created would still be low. Why has the model not been expanded?

I welcome the contribution of ICOS. On the issue raised by its representatives, with particular reference to the farming sector, we see the dairy sector doing so well and many others basically been run by co-operatives compared to the meat processing sector which during the years has moved into private hands.

Is there a need for a new round of co-operatives to deliver for the farmer? The delegates might also comment on the training provided for community groups that want to set up co-operatives.

The ACORNS story is magnificent. I congratulate Ms Fitzsimons on the work she has done. Can the six-month model be expanded? What three actions or measures would enable the outcome to be multiplied?

Some of the questions I asked in our earlier session are more appropriate to the delegates before us. I thank them for their contributions. On the issue of checks on childcare providers, are there plans to change the current system? It has been proposed that the local authorities take over responsibility for the checks on community groups, about which people are concerned. They may be experiencing problems, but they know that under Pobal they will all be subject to the same level of scrutiny. How will the process be scrutinised when responsibility is devolved to the local authorities? Also, what will be the cost of that scrutiny? People are concerned that the cost will be equal to the level of funding delivered. It is akin to a model of management developed in America some time in the 1980s and abandoned very quickly thereafter, whereby for every person working there were four measuring what he or she was doing. We must be careful not to end up with this scenario. In all cases, there has to be a sense of proportionality. I could give examples of cases where I felt the level of scrutiny was totally out of proportion with the funding being sought, but I do not propose to go into them in such a public forum. Where a community project receives funding to purchase equipment, it is purchased and an official from the local development company visits to check the invoice to check that the equipment has been paid for, including by viewing bank payment details and so on. In the past the word of the applicant was accepted. In my experience, it is no longer being accepted and everything is being rechecked over and over again. There is no trust. Trust needs to be re-established as community organisations are doing their best forcommunities. They are not trying to pull the wool over anyone's eyes. If there is a little slip here and there, it is not intentional. Trust must be extended to people who are, by and large, working voluntarily. I understand we are speaking about public money and accept that there is a need fir accountability, but at the same time there has to be a sense of proportionality.