Seán Conlan (Cavan-Monaghan, Fine Gael)

The Microenterprise Loan Fund Bill 2012 is a further strand of the suite of finance packages being put in place by this Government, to support the SME sector in its efforts to survive the current recession and begin to move forward again and develop so that they can continue to play the crucial role they have played in the past in creating much needed employment. This is ongoing proof of the Government's commitment and determination to deliver on its programme for Government by ensuring that avenues of funding are maintained to support viable SMEs, especially the more vulnerable ones that are currently experiencing difficulties in accessing the finance needed to develop new ideas, create employment and preserve existing jobs.

I acknowledge the efforts of the Minister, Deputy Bruton, and the Minister of State, Deputy Perry, in finding innovative ways of kickstarting the economy in the current very difficult climate. The funding in question is aimed at small enterprises with fewer than ten employees and with an annual turnover not exceeding €2 million, that are in the precarious position of having been denied access to bank funding through the normal channels. It is vitally important that every effort is made to keep these small enterprises in the game in order that they, too, can play their part in the recovery that will come, despite all the negative reports to the contrary.

There is unquestionable proof that banks are refusing loans to credit-worthy and viable SMEs. There is evidence to this effect from such reputable institutions as the Central Bank, where researchers have verified such practices, from the Credit Review Office, which is in daily communication with and has first-hand experience of the sector, and from the Irish Small and Medium Enterprise Association which deals with these problems every day.

This scheme seeks to remedy a situation in which the Central Bank has found evidence that a moderate decline in credit applications is contrasted with a very large increase in credit rejection rates, that run at 15% to 18% ahead of comparable eurozone rejection rates. The inability of many in this sector to secure so-called letters of credit, which do not involve any credit at all except in the case of default, is having serious implications for many as it renders it impossible for them to engage with direct suppliers abroad. This has the unfortunate effect of making it necessary for those affected to buy their raw materials, or whatever, from third parties, adding a layer of expense they cannot afford to the transaction.

I am glad to see this funding programme is being delivered through Microfinance Ireland, which will be a subsidiary of the Social Finance Foundation, an organisation that has considerable expertise in the area of funding enterprises that are experiencing stress. Its expertise and experience will stand the organisation in good stead in successfully undertaking this important task. It certainly is an important task because the organisation will hold the fragile hopes and dreams of a nation in its hands.

The recovery in this sector is our ticket out of jail, especially in constituencies such as Cavan-Monaghan where SMEs are the only thing standing between our people and the dole queue or the aeroplane. There are viable enterprises in the sector which will not survive without this crucial help. It is incumbent on us, as a Government, to ensure the survival of these enterprises which, collectively, are responsible for the employment of hundreds of thousands of people throughout this country. It is our responsibility in Government to get this legislation in place and ensure these small enterprises survive to take up their rightful place in carrying this country forward. They are the rock on which the country was built, they can be relied on and they are constant. They are not going anywhere because they are already at home.

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