Brian Lenihan Jnr (Dublin West, Fianna Fail)

I propose to take Questions Nos. 7 and 23 together.

The Department of Enterprise, Trade and Innovation and Forfás have carried out a detailed examination of loan guarantee schemes and my Department has engaged with them. There are a number of difficulties with the design of a loan guarantee scheme including, how it fits in with the other Government initiatives to support small and medium-sized enterprises, how to ensure that the loans covered would be additional to lending which would otherwise take place in any event and the additional costs and exposures to financial institutions of such a scheme. The Credit Review Office has been set up to ensure that the banks are not refusing credit to viable businesses and it would not make sense to guarantee loans to unviable businesses. I believe Deputy O'Donnell suggested during the NAMA debate that we should have some form of direction regarding banks and lending, and that was the genesis of the Credit Review Office idea. In addition, the SME lending plans of AIB and Bank of Ireland mean that credit should be available as required by small and medium-sized enterprises. Officials from both Departments will work with John Trethowan of the Credit Review Office on options to enhance support for small and medium-sized enterprises. There is no provision in the this year's budget for such a scheme and the 2011 budget, as we know, will be announced in December.

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