John Halligan (Waterford, Independent) | Oireachtas source

I am taking this question on behalf of the Minister of State, Deputy Breen, who is delayed in Brussels. On 3 November 2016, the Minister of State provided the Deputy with the most recently available breakdown of the value of approvals by county as at 21 October 2012, as given to the Minister of State by the new operator of those schemes effective from 17 October 2016 - the Strategic Banking Corporation of Ireland, SBCI. Since then, the Minister of State has received the third quarterly report for 2016 for the period July to September 2016 and published this report on the website of the Department. If the Deputy does not have the report, I will make sure he gets it. The SBCI has advised that the total value of loans approved under the schemes since its inception in October 2012 exceeds €60 million. The actual draw down of these facilities in the same period is approximately €17 million. However, it is not possible to provide a breakdown of draw downs by county for data protection and confidentiality reasons.

A loan under a credit guarantee scheme is one with a higher degree of risk because the SME in question has already tried and failed to get a bank loan before applying under the scheme. Once a loan is approved, it is entirely a commercial matter for the SME to decide whether or not the loan will be drawn down in whole or part. While the benefit of a guarantee is offered to a borrower under the scheme, some borrowers do not proceed.

Recognising that deficiencies in the original schemes and legislation were impeding use of the novel approach of credit guarantees, the Government decided on a process of review and reform and an amendment Act was subsequently adopted in February 2016 extending increasing the level of risk taken by the State, extending the definition of lender and loans to cover sources of finance other than banks, involving the SBCI in this area and enabling the SBCI and the Minister of State to work together to unlock EU funding sources for our SMEs. Work is currently being finalised on the new credit guarantee scheme and on the introduction through the SBCI of new risk sharing counter guarantee products. These will ensure that the future schemes are more fully aligned to the needs of business and will lead to an increased take-up of approvals.

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The Government remains committed to ensuring that our SMEs have access to appropriate finance for their business needs, which will ensure that they continue to grow and develop. The credit guarantee schemes and the new counter guarantees are a central element of those supports which, when combined with other Government initiatives such as Microfinance Ireland, the SBCI, the Credit Review Office and the prompt payment code, should enable companies to expand, service new markets and grow employment.

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