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

The credit guarantee scheme is an initiative that was called for by entrepreneurs, businesspeople and their representative bodies for several years. Despite commitments to deliver such a scheme, previous Administrations failed to do so. Upon taking office I sought and received Government support to design from scratch a new scheme which was successfully launched on 24 October last year. As at 10 May, 36 live CGS facilities have been put in place, resulting in €3,661,100 being sanctioned through the scheme by participating lenders. It is expected that 190 new jobs will be created and 115 maintained under these facilities. This is lending and job creation that otherwise would not have happened

The scheme does not involve the taxpayer replacing the banks in providing lending directly to business. It is aimed, rather, at filling a gap in the market for bank lending to particular types of businesses with a shortage of collateral, or in innovative sectors that the banks may not be familiar with, by shifting a proportion of the risk to the State and thereby incentivising the banks to lend. In designing the scheme, a balance was struck between exposing the taxpayer to excessive risk on the one hand and, on the other, ensuring a proper incentive for lending to businesses. The scheme was designed in accordance with international best practice.

The Minister of State with responsibility for small business, Deputy John Perry, and I promote the scheme at every available opportunity, locally, regionally and nationally, as appropriate. In addition, a direct link to information on the scheme can be found on my Department's website homepage, . Quarterly progress reports are also published on the website. The latest progress report, detailing the analysis and performance of the CGS for the quarterly period ending 31 March 2013, is now available.

The scheme is designed to facilitate up to €150 million of additional lending to eligible SMEs per annum. It is demand-led and the uptake may be lower than €150 million in any given year, depending on company needs. Take-up of the scheme is being closely monitored by its operator, Capita, and my Department. I committed to review it after 12 months of operation.

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