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

I move amendment No. 3:

In page 5, line 9, to delete “to which credit has been provided” and substitute the following:“but only to the extent that the credit granted to it under the credit agreement concerned was provided”.

The aim of this part of the Bill is to ensure that SMEs which have borrowed from regulated firms maintain the protection they had. It was never the intention to capture SMEs which borrowed from legitimately unregulated firms. These firms are an important source of funding for SMEs and we do not wish to restrict the flow of funds to SMEs in any way. Therefore, this amendment is largely technical in nature and serves to ensure the definition of the SME credit covered by this Bill is as intended. This is done by amending the definition of relevant borrower to restrict it to credit provided by a regulated financial service provider.

This amendment restricts the definition to ensure that where credit has been granted to an SME by a number of providers, both regulated and unregulated, it is only the credit that was originally provided by an authorised or regulated financial service provider that is covered by this Bill. The amendment is intended to ensure that SME credit which is sold by regulated entities is protected without impacting on other SME credit. Therefore, the amendment ensures that SMEs will continue to enjoy the protections they currently have when they borrow from regulated lenders, for example, the code of conduct for business lending to small and medium enterprises, but we are not extending the remit.

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