Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

One of the major differences between the on-lending model through a wholesale provider of funds and what we are used to with high street banks is that the network is not in place. We will move to set it up immediately, but the first set-up will be some type of central office, probably in Dublin. It will not have a network of offices in every town in the country. The obvious way to deliver money to SMEs throughout the country is to have an on-lending arrangement with the institutions that already have networks. We will start with the established banks; then new entrants will come in, to be followed by companies such as Microfinance Ireland. I am a little vague about the model for Microfinance Ireland because it is in transition. It has a new chief executive. There are major changes in the agencies assisting industry - for example, the local enterprise offices are now playing a stronger part. The intention is that after the discussions between the new institutions and the Department of Jobs, Enterprise and Innovation, Microfinance Ireland will be an on-lender and provide credit on much the same terms as on-lenders in the banking sector. That would imply a reduction in interest rates from their current level. The details have to be worked out because Microfinance Ireland is under review and the new chief executive has been put in place.

Why not do it all on the one day? We are starting something new which, as Deputy Peter Mathews pointed out, is going to be a permanent feature of the Irish financial landscape. We hope it will be a significant investment lender in the economy for many years to come. We hope what we are putting in place will be something like what our predecessors did when they established the IDA or one of the institutions which were very successful.

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