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

I thank the Deputy for his question.

The programme for Government contains a commitment to investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions. The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs is the lead Department in respect of this commitment and my Department will support it. Previously in 2015, the Savings Banks Foundation for International Cooperation, SBFIC, with the support of the Public Banking Forum of Ireland, submitted a proposal to the Department of Finance regarding the development of a local public banking system in Ireland. The proposal was considered in detail by officials in my Department and there was engagement with the SBFIC, the Public Banking Forum of Ireland and Irish Rural Link on the issue.

It was not clear, at that time, how the local public banks proposal could create a distinct product offering and avoid replicating the significant regional and national supports that had already been put in place by the Government. Government initiatives to support the financing needs of SMEs include the Strategic Banking Corporation of Ireland, SBCI, the supporting SMEs online tool, the Credit Guarantee Scheme, the Microenterprise Loan Fund scheme, Local Enterprise Offices and the Credit Review Office.  The success of these policies can be seen in increases in new lending from bank and non-bank sources, the number of new credit providers active in the market and the reduction in average interest rates for SMEs.  

Regarding the current programme for Government commitment, I understand that the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs has been in contact with relevant stakeholders and has now received details of a proposal on local public banking. I understand that the Department now intends to work with other Departments and stakeholders to examine the feasibility of developing this further. My Department is, of course, available to assist the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs as it investigates this matter.

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