Seán Kyne (Galway West, Fine Gael)

Whatever one's socioeconomic viewpoint there can be no denying that access to finance and credit is critical to the success and sustainability of small businesses which are, in turn, crucial in providing jobs in every community across the country. Almost 200,000 small firms provide employment for over 650,000 citizens a level of employment higher than either the multinational or public sectors.

The Government, being acutely aware of this, has demonstrated its commitment with a range of measures to support and help small businesses. The advisory group for small business, chaired by the Minister of State with responsibility for small business, Deputy John Perry, had extensive consultation with a range of stakeholders to examine what is required in order to remove barriers and to help our small businesses compete. It is an important plan of action which clearly sets out what we need to do and even more important, it identifies those responsible for achieving the stated goals.

The Microenterprise Loan Fund Bill is the latest measure introduced by the Minister, Deputy Richard Bruton and his Department and its genesis can be found in the report on the advisory group for small business. The support the State has afforded the banking sector has been well documented. Some banks were saved on account of their strategic importance to the entire economy while others were saved with more questionable justification. However, once decisions of that magnitude are taken, it can be almost impossible to deviate from the course of action without substantial further cost.

By rights, this Bill should not be necessary. It is entirely plausible and appropriate for citizens to expect the banks to ensure an adequate and steady access route to credit. However, Central Bank research proves, to the shame of the banking sector, that our country is the most difficult country in the eurozone in which to access credit. I recently received representations from a local company in Galway, of many years standing and success, whose efforts to expand by tendering for contracts from abroad were being hampered by the unwillingness of two banks to provide guarantees or letters of credit. The attitudes of the banks have endangered not only the employment of this company's workforce but also that of many other local companies.

The advances in technology have transformed the marketplace so that while the focus of the mircofinance fund will justifiably be at the community level, the potential for it to assist our indigenous companies to compete on the global scale are immense. As a small, open economy with a straightforward, investment-friendly framework, enabling local businesses to compete on a European and global level is a logical step and an opportunity which must be encouraged and taken. Just as our wonderfully talented artistic and cultural organisations are internationally renowned, so too can our indigenous businesses be ambassadors for Ireland.

The presence of some of the world's largest organisations in Ireland, some of which have established their Europe, Middle East and Africa area headquarters here, is another reason for the importance of promoting and facilitating access to credit for small businesses. The clustering effect which has emerged for several industries, including information and communication technologies, pharmaceuticals and medical devices, has encouraged and stimulated local entrepreneurs to identify and grasp opportunities overlooked by the bigger multinationals. In some cases these smaller Irish start-ups have grown to become leaders in their respective industries.

In the past the Irish banks have been the mainstay for providing the financial support and investment required by such companies. However, following the financial and economic turbulence of recent years, a reluctance to take chances has emerged. Undoubtedly, caution and oversight are required for the process of supplying credit and investment but we have reached a stage where previously successful businesses or new businesses with sound entrepreneurial plans are being denied the funds necessary for growth and expansion. In such an eventuality the State must intervene and demonstrate its faith in our entrepreneurs. Although some financial institutions are co-owned by the State, it is not possible for a number of reasons, not least proper governance, for the State or the Department of Finance to become involved with individual cases or the day-to-day running of these institutions. The microfinance loan fund, alongside the Credit Guarantee Bill which was passed by Dáil Éireann last week, will provide a new avenue for the many constituents who have contacted their local Deputies to express their frustration with accessing credit from banks and who have asked Deputies to set up meetings with the Department of Finance so it can peruse their requests or intervene in some manner to provide access to credit which thus far has been refused. There are many examples of that across the country.

For an initial outlay of €10 million, to be supplemented by borrowings totalling over €15 million, over 5,500 microenterprises will be able to expand or start up, which will result in an estimated 7,700 jobs. I look forward to the implementation of the other recommendations from the Department on small business. If we could help each small firm employ one extra person, our unemployment rate would be cut substantially and, more importantly, hundreds of thousands of citizens would benefit from the independence, fulfilment and personal development that having a job provides.

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