Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

My Department has launched two new credit schemes. While these schemes were considered by the previous Minister, he did not deliver them. My Department has delivered two new instruments, the microfinance scheme which was launched last week and the loan guarantee scheme which will be, as stated in my reply, launched imminently, which means within the next fortnight.

There are huge problems in terms of bank lending. We are seeking to introduce schemes to assist where the system is not working. It is important we give a break, through the provision of microfinance, to those wishing to start up a business. We are also seeking to introduce a scheme for loan guarantees.

To answer Deputy Calleary's point, the banks are still those who give the loan. Where a loan has been turned down the credit guarantee scheme is applied, and in return for this guarantee we charge a 2% premium on top of the rate which would otherwise have been provided to the lending. Our scheme is to intervene where people are turned down wrongly because of a system whereby the bank rejected the risk on the grounds of collateral or because of the sector. This intervention is very targeted.

As the Deputy stated, I accept wider issues exist with regard to banking. We need to get to grips with banking and no State scheme can fill the gap whereby banks must take primary responsibility. They are who are responsible primarily to deliver credit to a small exporting economy and they must deliver it.

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