Áine Collins (Cork North West, Fine Gael)

I welcome the opportunity to speak on this Bill. The Bill is another step by the Government to put in place initiatives to sustain small and struggling businesses so they can survive and return to growth. It will also encourage people to set up much needed new businesses.

The Minister for Finance and the Minister for Jobs, Enterprise and Innovation have continued to identify the lack of finance from our banks as a core problem, which the Government continues to monitor. However, the problem is broader than that. Confidence in the economy is a huge factor in deterring business people from starting up and expanding businesses. The establishment of a microenterprise loan fund is one of the many initiatives the Government has introduced to provide them with support. We must ensure finance is available for small and new businesses. These initiatives will create the atmosphere of confidence which will benefit the economy as a whole.

It is important to ensure, as the Irish Banking Federation suggests, that this scheme is up and running by the autumn. The purpose of the scheme is to provide loans to businesses which banks are not in a position to provide because of the risk associated with small and new business. The fund will be managed under the Social Finance Foundation, SFF, on behalf of the Minister for Jobs, Enterprise and Innovation. It will be established as a subsidiary of the Social Finance Foundation and, as the press release states, the intention is that under the guidance of the SFF the subsidiary will be equipped with the necessary levels of finance systems and skills and supported by the European Investment Fund, EIF, guarantee scheme to ensure a high level of efficiency, relevant expertise and strong corporate governance. A single lender will, in the first instance, minimise the costs which are traditionally high with micro finance, as well as ensure a clear financial and management information reporting structure. This will enhance the possibility of EIF assistance and allow for the clear identification of the costs involved in operating the scheme.

This all sounds very good but we must remember at whom the scheme is targeted, small businesses with fewer than ten employees. The owners of these businesses find the existing services through enterprise boards and local development companies very confusing and extremely bureaucratic. It is one of the reasons that many small businesses shy away from seeking support. Two years ago in Cork the economic development department of Cork County Council set up a fund of €1 million per year to perform a similar function to this fund. It identified gaps in existing programmes where the enterprise boards, the local development authorities and banks fell short of providing the necessary finance for a project. The council was able to help to provide the final piece of assistance which made the business proposition work.

I hope this proposed scheme does not add further to the concerns of small business owners by adding another layer of bureaucracy. The terminology used and the national structure could be off-putting for small enterprises. For that reason I welcome the Minister's suggestion that the fund will operate in conjunction with the enterprise boards. I believe it should also be expanded into local development companies. Perhaps the Minister will consider that. The fact that the enterprise boards will soon be part of the local authorities will facilitate this process and perhaps in the overall reform of local government, local development companies will also become more integrated.

In Cork, the council's economic development fund works through the enterprise boards and the local development companies under the auspices of the county development board to ensure there no duplication of services. It also works very closely with third level institutions to create the spirit of enterprise. This new fund could be assimilated into this process and in that way would be more accessible to local and small businesses. It would not be as daunting as dealing with one agency after another, which is what we are trying to avoid.

This Government is doing everything possible to encourage businesses and create jobs. If the Government's initiatives are to be successful when dealing with smaller businesses, in particular, they must be fully integrated and administered locally with the minimum amount of red tape. A new entrepreneur must have the confidence that they can easily access support. These are the businesses that will make a huge contribution to creating jobs. In fact, 70% of new jobs will come from new businesses, many of which will be supported by these initiatives. A multiplicity of agencies and complicated procedures will slow down the process, if not stop it. For that reason it is crucial that the local enterprise offices, LEOs, and the one-stop-shop approach, as is indicated in the jobs initiative, are implemented as soon as possible.

Finally, I ask the Minister to consider, as part of the process of being granted a loan, requiring that a business would also have to benefit from mentoring for a specified period of time, ideally for 12 months. Business mentoring support can make the difference between success and failure for small enterprises and new businesses. I have worked in this area for many years and I have seen the difference mentoring can make to a business and to the development of the individual business person, as well as the leadership skills from which they can benefit. I commend the Bill to the House.

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