Kevin Humphreys (Dublin South East, Labour)

I welcome the introduction of the Microenterprise Loan Fund Bill, which is a key part of the action plan on jobs. It shows that the Government is delivering on promises made in the programme for Government.

I welcome Deputy Boyd Barrett's conversion on the issue of rates. I spent many years on the city council where his colleagues continuously voted against a reduction in rates for small and medium-sized businesses. How quickly they forgot that when they arrived here. I was reminded recently that the Deputy's colleagues voted against funding to keep three swimming pools open in areas of Dublin that badly needed such facilities.

I thank the Minister and his Department for having brought forward this measure quickly, along with the recent Credit Guarantee Bill. The Bill before us is another small step in the right direction to deliver sustainable growth in the economy. It will restore confidence to the SME sector, which can be an engine for growth, helping to create and sustain domestic jobs.

Some 1.8 million people are employed in Ireland, of which one third or 650,000 are in small businesses. We therefore need a strong mix of measures that targets growth and supports where they are needed. A statutory micro-credit scheme is something that has been missing from our basket of policy measures for too long.

Approximately 200,000 small businesses are providing jobs in parishes, villages and towns across the country. Deputy Durkan mentioned earlier how important the small business sector is, particularly in rural areas.

When somebody creates a job through their own business, it has the potential to create even more jobs. I applaud the courage of those who start up small businesses. Access to credit is important in this regard. Many such businesses use bank overdrafts as their working capital. However, I have heard examples of where this lifeline for many SMEs has been closed or withdrawn from existing businesses. As a result, it is almost impossible for new start-ups to access credit.

I recall a recent story about a small restaurant in Dublin that was funded by its owner's credit card, but that is not sustainable funding. The model we are bringing forward through this Bill will allow more small businesses to open.

There are many commercially viable proposals, yet banks will not lend them money. This Bill commits €90 million over ten years, but I am cautious as to whether this will be enough in the start-up stages. Consequently, I welcome the two-year review provided for in the legislation. It is important to recall other Government projects, including the credit guarantee scheme and the strategic investment fund, as well as many other business supports.

Once these are fully operational, the Minister should seriously consider combining these measures into a proper strategic investment bank. It would be a help to bring such measures under one management structure. I would urge the Minister to be mindful of the time factor involved. Applicants have already been refused funding from banks after a lengthy application process.

I also wish to seek assurances that the terms of the loans are not onerous. These are already difficult times and we must make it as easy as possible to set up small companies. I am concerned that the proposed limit of €25,000 may be too low, so it should be reviewed after two years. The Minister should consider setting the limit at €50,000 which would be better. In addition, I am concerned that the interest rate should not be set too high. Let us give the Bill time, however, to see how it works.

I am confident that this Bill will address some of the existing concerns. I also welcome the proposals in the Bill whereby audited accounts can be discussed at the Committee of Public Accounts. Oversight is very important so I am glad to see that that provision is contained in the legislation.

I ask the Minister to clarify the number of directors he intends to put in and how they will be appointed. I believe in evidence-based decisions, so I welcome the impact assessment provision. I note that the regulatory impact assessment estimated that, over ten years, the fund will benefit the Exchequer by €92.4 million at a cost of €20 million.

Previous Administrations used to throw large volumes of money at projects without any evidence base on its return. I therefore welcome the Minister's measured approach to this scheme, which will eventually benefit the State, taxpayers and those who set up businesses.

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