Dara Calleary (Mayo, Fianna Fail)

I thank Deputy Michael McGrath for tabling this motion which gives the House the opportunity to focus on the difficulties in Permanent TSB and the EBS mortgage market and the SME, small and medium business sector. I will continue the points made by Deputy Fleming.

The Government amendment to the motion with regard to the small and medium business sector is disappointing because it does not reflect what I know to be the views of Ministers and Government Deputies. The amendment states that the pillar banks have met their lending targets for 2011. They have met their targets by issuing financing such as loans to clear out overdrafts, by converting long-term working capital facilities into loans and by depriving SMEs of access to any kind of working capital facility to allow them to continue in business. The Credit Review Office maintains that the credit targets are being met but its calculations are based on credit approvals rather than on actual credit drawdowns. The banks may be sanctioning funding at ridiculous terms of interest rate or of personal guarantees with demands being placed on the borrower's personal assets. A loan may be sanctioned but it would be very interesting to see the figures for the period for drawing down the loan. The hurdles which are being put in the way of drawing down sanctioned loans are getting bigger every day, once again depriving the SME sector of necessary working capital.

The Central Bank has reported that in the first nine months of 2011, a total of €1.6 billion in new loans were issued to small and medium businesses. This may seem a very impressive figure but when it is balanced against the fact that in the period, banks removed €2.4 billion in credit by closing down facilities. This is the credit gap which we have to deal with every day in our constituency offices. Lending to SMEs is dysfunctional. In every announcement about job creation and a jobs initiative budget, reference was made to the credit guarantee scheme and we are no further on with regard to the roll-out of that scheme. There has traditionally been a reluctance within the Department of Finance for such a scheme but perhaps it is time for a declaration that this cannot be done if it is not going to happen. It is time for the Department to explain why it is opposed to the scheme. This scheme has been on the books for two years and it has been blocked by the Department. We need this scheme to maintain jobs. I know the Minister of State, Deputy Brian Hayes, is committed to the scheme but there is a blockage within his Department and as a result, all the talk of jobs initiatives is a waste of time.

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