Tom Fleming (Kerry South, Independent)

This is very welcome news. It is the most significant development in job creation for a number of years. It is anticipated that there is €90 million available for 5,500 microenterprises for over ten years, creating up to 8,000 jobs. I think the figure could be doubled, because that kind of promotion and activity should generate even more jobs. The vast majority of microfinance applicants are involved in the provision of local services and in small businesses. This stimulus to small employers engaged in viable job growing potential businesses is long overdue. Many small businesses were the backbone of their local communities until the economic downturn and the employment they provided, however small, was vital to the survival of their local communities. The demise of many of these companies over the past few years has been a hammer blow to their existence. It also impacted severely on the economic and social life of the communities in which they were located. Many people had long-term full-time employment with these small and medium enterprises. Their demise also contributed to emigration, while there was no lifeline for many of the redundant workers. There was often a lack of opportunities for both employer and employees on age grounds, and they faced the bleak prospect of never getting back into the job space again.

There are almost 200,000 small firms in Ireland, while 13,810 new enterprises started in 2009. Small firms employ almost 544,000 people, accounting for 45.7% of the total employed in business in Ireland. When we take into account the proprietors and family members directly engaged - they may not be drawing a salary as such, but would contribute to the business - more than 655,000 people are involved. Over 90% of these small firms employ fewer than ten people, while 49% are sole owner entities. They are involved in a wide range of activities, many of which are employment intensive including tourism, retail, construction and a host of other professional businesses and personal services. Prior to the recession, over 172,000 net jobs were created in services between 2000 and 2007.

There is a mindset that in the last two to three years it is futile to seek finance from the banks. That became part of the public consciousness and many just gave up after an initial inquiry, or did not appeal the initial refusal. However, there is an anomaly in this microfinance scheme for small businesses. They first have to go to the bank and be refused. Ironically, the State is giving the guarantee to the receiver and is thereby taking the full risk, so there is no risk for the bank. I do not know what has been happening in the banks in recent years, with all the different State guarantees of which this is another. That is one of the few faults I find in the legislation.

I believe this will be a significant stimulus and injection for all those engaged in small firms. There is also production in agriculture, horticulture and fisheries, yet these are excluded from the scope of the scheme because of certain restrictions and rules. I ask the Minister and Minister of State to consider this point. Where there is growth potential in these sectors perhaps they might look at this again and include them.

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