Ms Jean Carberry:

The original legislation provided for a microenterprise loan fund of €25 million and once that microenterprise loan fund was completely spent, it might not have been replenished. That was the sunset clause. There was also the fact that the parent was a body at arm's length from the Department. If this had not been a success, it could have spent the €25 million and then it could have closed down.

We have subsequently put in further funding into the microenterprise loan fund. It has €30 million in its bank account. Circumstances during Covid meant we had to put a lot of money in very fast because the loans were moving out very fast. Now the intention is that once they need further money, we will fold them into our estimates process.

To explain briefly the way the model works, MFI gets the money it lends out from the Strategic Banking Corporation of Ireland, SBCI. SBCI gets wholesale money from the ECB and, very cheaply, gives that money to MFI which MFI then lends out. It has a risk tolerance of about 30%, so about 30% of what it lends out does not come back. The Department pays for the operating costs of MFI every year and some of the losses on those loans. The other part of the losses is covered by an EaSI guarantee which is provided by the European Investment Bank. It is a nice neat model because we are really only paying for the operating costs and a small portion of the losses. The cost to the Exchequer is low.