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

The credit supply clearing group was established in May 2009 to identify patterns of events where the flow of credit to viable businesses appeared to be blocked and to seek to identify credit-supply solutions relating to these patterns. The group worked to provide a clear picture of emerging lending patterns, while facilitating direct discussion by all the relevant interested parties in addressing problems. It was chaired by my Department and included representatives of the banking and business sectors, with departmental representatives and representatives of the primary support agencies. The group met on eight occasions and the last meeting was held on 19 April 2010.

On foot of the work of the credit supply clearing group, the former Government established the Credit Review Office which took over the role of the credit supply clearing group in terms of identifying emerging lending patterns and credit-supply solutions relating to these patterns, while at the same time facilitating direct discussion with the relevant interests in addressing these problems.

Access to finance remains a critical element of the current Government’s economic recovery strategy. Oversight and monitoring by the Government are maintained by a Cabinet sub-committee on mortgage arrears and credit availability, of which I am a member. Policy development is supported by a Department of Finance-led State bodies group and a funding consultation forum which includes all relevant stakeholders and comprises representatives of the banking and business sectors, with departmental representatives and representatives of the primary support agencies. The terms of reference of the committee are centred on understanding, exploring and resolving the difficulties facing SMEs seeking credit.

The collapse of the banks has made it more difficult for SMEs to access credit. In response to this challenge the Government has implemented several policy initiatives: the micro-enterprise loan fund and the credit guarantee scheme; the establishment of the development capital scheme, targeted at mid-sized indigenous firms, with a total available fund of €225 million; the development by the National Pensions Reserve Fund, NPRF, of a range of support funds for the SME sector, totalling €850 million; the provision of €175 million of new Exchequer funding through the seed and venture capital schemes - this is leveraged for such projects up to approximately €700 million in line with experience; the pursuit of collaborative initiatives with the European Investment Bank such as the provision of a loan guarantee for some of the Microfinance Ireland portfolio; the Credit Review Office has been strengthened and is now overturning over half of the decisions appealed to it.

While surveys reveal rising demand for SME credit and a decline in bank refusal rates, the challenge remains substantial. As the issue of access to credit remains a major concern for Irish business, the Government maintains a close watch on developments in the area. The Action Plan for Jobs 2013 sets out a number of actions to continue to address matters in the coming year.

See this speech in context