John Perry (Sligo-North Leitrim, Fine Gael)

A key priority of the programme for Government is to ensure an adequate supply of credit is available to fund small and medium-sized enterprises. Work is well advanced in my Department on realising our commitments in terms of the temporary partial credit guarantee scheme and the micro-finance loan scheme. The design phase of the temporary partial credit guarantee scheme has been completed and formal proposals will be brought to the Cabinet shortly. Once the design is approved by the Government, a further request for tender will be published to select an operator to allow for the roll-out of the scheme in the coming months. In parallel with the work taking place on the scheme's design, my Department is preparing primary legislation to make the necessary statutory provision for such a scheme.

The micro-finance fund to provide loans for small businesses is also being developed by my Department. This proposal is being designed to stimulate lending to sustainable micro-enterprises. It is targeted at start-up, newly established or growing micro-enterprises across all industrial sectors employing not more than ten people. It will provide loans of up to €25,000 for commercially viable proposals that do not meet the conventional risk criteria

The Minister for Finance has restructured the banks and deleveraged the banking system. This is the principal response to the problem of making credit available through banks. These initiatives have ensured the capacity for the pillar banks to lend to SMEs and other important sectors is in excess of €30 billion during the next three years. The Government has imposed lending targets on the pillar banks for the three calendar years from 2011 to 2013. Both banks will be required to sanction lending of at least €3 billion this year, €3.5 billion next year and €4 billion in 2013 for new or increased credit facilities for SMEs.

Businesses having difficulty with credit refusals can use the services of the Credit Review Office which will carry out an independent and impartial review of the banks' decisions to refuse or reduce credit. The office will also monitor the performance of the banks in meeting their lending targets.

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