Mr. Seamus Boland:

I thank the committee for inviting Irish Rural Link and Sparkassen to address it on the cost of doing business in Ireland.

Irish Rural Link is a national network of rural community groups. It represents over 600 community groups and over 25,000 individuals who are committed to creating socially, environmentally and economically sustainable rural communities. As such we are well aware that SMEs and micro enterprises are the back bone of rural economies and a valuable employer. We can also attest to the fact that the impact of the recession is still being felt in many rural areas, which have not seen the same level of economic growth or employment as urban areas have enjoyed over the past couple of years.

Recently, we submitted a submission to the Department of Business, Enterprise and Innovation, which is attached to the documentation that we have supplied to the committee for today's meeting. In our submission we highlighted some areas that we have identified as contributing to the difficulties of business and thus the cost of doing business in rural Ireland. We are cognisant of the broader issues related to costs such as rates, planning permission, utilities and a lack of broadband and we are active in many of these areas.

Irish Rural Link has also focused on the area of access to finance. We have come to the realisation that Ireland should examine the feasibility of providing a regionally based public banking model. In that sense, we have invited the Sparkassen Foundation to work with us to design a model which is based on the hugely successful Sparkasse model of public banking in Germany.

As the committee may be aware, last year we actively participated in the investigation into this model that was jointly carried out by the Department of Finance and the Department of Rural and Community Development, a report on which is due to be published soon. We believe this model of regionally based banks will help to address the direct costs incurred by SMEs when doing business such as interest rates and other charges. Furthermore, we also see the reintroduction of a more customer focused relationship banking model that would reduce indirect costs for businesses. For example, the time and effort that many small businesses expend in their efforts to access finance.

I will hand over to my colleague, Mr. Harald Felzen, who will outline the Sparkasse model in greater detail.