Mr. Declan Hughes:

At the moment businesses have had loan breaks, for example, with their banks, which may be expiring and they are now putting additional facilities in place. Businesses are obviously taking precautionary measures to ensure that we have the necessary cover. They apply, go through the application process and then they get approval from the bank. The next stage involves drawing down the funding. We saw that at the start of the crisis in March and April when we saw a spike in overdraft applications and facilities being put in place but not actually being drawn down. What we are saying to businesses is to ensure that they have the facilities in place, in particular now with the credit guarantee scheme, but for Covid, and to cope with the unknown we face in the coming weeks, but also in the context of Brexit. The credit guarantee scheme is a facility that provides essentially six-year money of up to €3 million at attractive rates from the pillar banks. We have also just completed an open call and we have a number of other parties, financial institutions and lenders in the market, who are interested in participating in that.

In terms of the numbers that are going through the credit application process, I think it was about 850 on the previous Friday and it was up to 1,250 last Friday, an increase of nearly 50% on the applications that are being processed through the banks. The banks are reporting strong and brisk interest. We will report next week on the numbers of applications, those that have been approved by the banks and the actual drawdown so we will have a good picture of what is happening in each of those areas.

In response to the question on why businesses might not take part in the scheme, we know from surveys by ISME and others that 60% of businesses did not have debt facilities previously, so for some of them they may be reluctant to take on debt. They are also assessing their financial position and working through in terms of their financial planning. That has been one of the areas on which the local enterprise offices have been working very closely with businesses through their business continuity vouchers sector to make sure they have those financial plans in place. We anticipate that the demand for the credit guarantee scheme would step up. As I indicated, in the first five weeks we had 1,200 go through to the final stages and it will step up significantly in the coming weeks. We saw something similar with Microfinance Ireland, MFI, during the summer where we had an acceleration in its loan applications to small businesses. Up to €19 million was approved up to July, and then that tailed off as the economy began to reopen. MFI, for example, would stand ready now to support businesses over the coming period, during level 5 but also in preparing for Brexit next year.