Kieran O'Donnell (Limerick City, Fine Gael)

I welcome the opportunity to contribute to the debate on the Microenterprise Loan Fund Bill 2012, which is a welcome measure. I have no doubt the Minister, Deputy Bruton, will ensure it is innovative. More than 6,000 people are employed in the SME sector in Ireland and they are the lifeblood of the economy. It is great to see the multinational sector doing well but the SME sector is a huge driver of the economy. What many of those in the sector have in common is that they are risk takers. Many of those establishing small businesses have been successful and taking enormous risks is part and parcel of being in business. At present, the banks are risk averse. This is part of a suite of measures to help the SME sector. The loan guarantee scheme was published by the Minister and I very much welcome it. We now have the microenterprise loan fund through which microenterprises and start-ups employing no more than ten employees will be able to obtain loans of up to €25,000, which is a tremendous amount of money for businesses in the start-up phase. The Department of Jobs, Enterprise and Innovation will put €10 million into the fund and over time this can be increased to €25 million and I hope it will reach this level. I also welcome section 9 of the Bill which states the fund will be able to accept gifts of money, the purpose of which is to the benefit of the fund, and upon such trusts or conditions as may be specified by the donor. However, we must have transparency with regard to the source of the money and the purpose of the fund.

This is a venture capital fund for newly established small and growing businesses. Ireland is risk averse and does not reward risk-takers in the SME sector. If people fail in business for whatever reason, it is seen as a black mark. They should be seen as people who pick themselves up and move to another business. Many entrepreneurs throughout the country failed in their first and perhaps second business. However, risk-taking is part of their make up and they are willing to enter areas into which other people will not go. Recently I met representatives of a US company which employs people who were self-employed and may have failed, because invariably they understand business. One of our silver bullets will be the SME sector. This proposal is geared towards providing funding for projects with a larger element of risk than the banks are willing to accept. We need to support these enterprises and put this measure in place.

I hope this will be up and running by early autumn. The terms and conditions and the cost of the money should not be so onerous that it will be impossible to qualify. This is a venture capital fund on behalf of the State to drive the SME sector in establishing businesses in high-technology areas, areas with potential for growth and, in particular, with potential for job growth.

In his reform of the enterprise boards and the new business element in the Department of Jobs, Enterprise and Innovation, the Minister is considering the cohort of enterprises which employ between ten and 50 people. Until now the enterprise boards have looked after companies which employ fewer than ten people while Enterprise Ireland has looked after those which employ more than 50 people.

Through this Bill the Government is entering an area which is exciting and cutting edge. It will work hand in hand with business to create jobs, to foster those taking risks in business and, above all else, to drive Ireland towards full economic recovery in the years ahead.

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