Thomas Pringle (Donegal, Independent) | Oireachtas source

I will raise a number of points. Everybody is supporting this legislation and it is vital to ensure microenterprises can continue to work, or to put in place the resources for them to continue to work in the current climate. However, we need to consider why we have arrived at this position. Due to the length of time it has taken to form a Government, legislation could not be passed during that period. While it may be unusual that the coronavirus and the general election clashed together to make this happen, as a body politic we have to look at how our Constitution impacts on this matter as well. The Constitution was written at a time when we had two and a half parties in the State. In 1937, it was envisaged that Fianna Fáil and Fine Gael would interchange, with one out of power and one in power and that party would go straight into government. The reality is that does not happen any more and that is the case right across Europe. It is not unique to Ireland or anywhere else. Time will be taken after all elections for negotiations to take place and parties to come together to form a Government. We have to recognise that. I call on the Government to look at this issue and the constitutional requirements involved. We will probably have to have a referendum, so that will need to be looked at. We do not want to have the same problem after the next general election where urgent legislation may be required but we have to wait until the formation of a Government. A way can be found to ensure talks on the formation of a Government can take place and that government can function in the interim period. That needs to be considered and I ask the Government to look at that because it is vitally important.

The Microenterprise Loan Fund (Amendment) Bill 2020 is obviously very welcome. I have listened to the contributions over the last few days about the interest rates charged on the loans that have been granted and it sticks in one's craw to see interest rates of 5.5% or 6.5% being charged when normal interest rates are around 0.5% or 1%. That is a barrier. I would like to see information about how big a barrier it is because I imagine if I was in business and was going down the tubes, if I could get money at 5.5% I might take it to keep myself going. One might not decide to do that but it is definitely something one would have to consider. There may be many other issues around why there is such a poor uptake of this loan. Based on the Microfinance Ireland website, at first glance it appears to be successful. So far, 3,169 loans have been approved which are protecting 8,020 jobs. That is very welcome. However, there are 249,000 microenterprises in this State, which have all been affected by the Covid crisis and one would imagine that the demand, intensity and need for finance to keep going would increase. While I know there has been a lacuna period during which loans could not be granted, the number of loans received from Microfinance Ireland represents 0.012% of microenterprises in the country. That is extremely low and I wonder if this Bill had been passed and the money had been in place in time, whether that figure would be significantly higher. We should be expecting 15% to 25% of businesses to be applying for and getting loans.

The loans also need to be looked at further because of the amount of information required, the work that has to be done and the cost involved in getting the loan and providing all the paperwork that is needed. That must be looked at and addressed. I would like to see a report on what the barriers are for businesses in attracting loans.

I believe that small or microenterprises are the key to all of our constituencies throughout the country. There is a huge amount of employment among them. A huge number of people working in microenterprises struggle at the best of times and probably need this support.

I will support the legislation but it needs to be looked at and evaluated over time with regard to what the actual barriers are. The interest rate is probably one of the barriers and perhaps the publicity it has received has prevented people from looking to access the funding but there are an awful lot more barriers in place. Many small businesses do not have the level of paperwork required to consider the loan. There is also an item with regard to de minimis aid and whether an enterprise has received previous supports. I do not know what impact this has on the ability of Microfinance Ireland to lend to a small business but perhaps it is a barrier that prevents businesses from going further with an application. All of this needs to be looked at. The number of businesses applying to the fund needs to be increased significantly for it to have a genuine impact.

As an aside, I was looking at the criteria for qualifying for the loan and it is interesting to see that illegal economic activities are barred. I wonder why this even had to be included among the criteria. It is good that they are barred but I wonder why it has to be there.

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