Billy Kelleher (Cork North Central, Fianna Fail)

I propose to take Questions Nos. 38, 66 and 68 together.

As I have outlined to the House in recent months, in supporting small and medium-size enterprises, SMEs, the Government's focus has been on actions to sustain a positive business environment, including the proper functioning of the banking system, allied with specific targeted supports for SMEs through my Department's enterprise development agencies.

Developments in the financial sector and wider economy during the last year have broadened the concerns for SMEs in terms of gaining access to finance and bank credit. My Department and I have held regular meetings with the representative bodies of the SME sector and other stakeholders regarding issues impacting on the sector. The Government established the round table talks on access to bank credit and subsequently the credit supply clearing group, with a dedicated e-mail contact point on my Department's website to deal with access to bank credit issues specifically.

We are all aware of SMEs' difficulties in accessing credit. We want to collate the information and present it to the banks in a scientific manner by way of explanation of those difficulties. Every Deputy who speaks in the Chamber highlights the issue, but we need detailed information. This has been forthcoming, including from Deputies.

The Government has focused on creating a fit-for-purpose banking system and has taken actions to sustain the banks and facilitate the flow of credit to the wider economy to ensure that all banks are effectively good banks and can provide the normal range of services to business clients. The bank guarantee and recapitalisation schemes, the nationalisation of Anglo Irish Bank and the passing of the NAMA Act are all aimed at this. The NAMA Act has been further strengthened by the Government amendment providing the Minister for Finance with a power to issue guidelines to the participating institutions in the NAMA process on lending practices and procedures to improve the flow of credit to small and medium-size enterprises and, if necessary, to other sectors.

There has been a major downturn in the global economy. We are in an international recession and our export markets in some areas have shrunk. The weakness of sterling vis-À-vis the euro is putting considerable pressure on particular sectors of the economy. We also had impaired banks and balance sheets. Let us be honest - accessing credit on international markets and allowing a flow of credit into the SME sector has proven difficult for banks since last year's bank guarantee. However, there has been a reduction in the demand for credit, as has been borne out by the Mazars report. Another Mazars report on a more up-to-date analysis of lending practices and the flow of credit into the SME sector will be published soon. This is a major difficulty. If credit dries up, it can cause the economy to grind to a halt. The banks have been recapitalised. Now that NAMA is in place, the impaired balance sheets can start to be addressed. Responsible lending practices are needed to ensure there is a flow of credit into small and medium-sized businesses. If businesses that are struggling, but are potentially sustainable over the short to medium term, can get to the other side of the downturn, they will be in a position to retain as much employment as possible.

Everybody accepts that the small and medium-size sector is the backbone of the economy. There is a very strong innovative and entrepreneurial instinct in Ireland. The strong yearning of the Irish people to set up businesses on a regular basis has been fostered at every level, primarily by agencies like the county enterprise boards and Enterprise Ireland. As I said in response to a previous question, such bodies are very supportive of those who are spawning enterprise, innovation and research. We are very conscious of the need to continue to do everything we can in this regard. We met representatives of the banks last week to discuss how European Investment Bank money can be pushed into the economy. The officials in question will be able to go back to the European Investment Bank, which has said it will make further moneys available at preferential lending rates.

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