Carol Nolan (Laois-Offaly, Independent) | Oireachtas source

Tá áthas orm labhairt ar an mBille fíorthábhachtach seo. The purpose of this Bill is to make particular amendments to the Credit Guarantee Act 2012 to support the needs of businesses to access additional finance as a result of the Covid-19 crisis. I support that principle. However, I have some concerns.

In May of this year I engaged with the Minister for Finance on the need to expand the way in which the credit guarantee scheme has operated to date. At that time, I made the point that microenterprises and SMEs related to agriculture, horticulture and fisheries were excluded from 2012 onwards from the scope of the existing credit guarantee scheme because of particular restrictions in regard to state aid rules. I was concerned about this and I suggested the introduction of the low interest loan Covid-19 market disruption support scheme which the Irish Farmers' Association, IFA, and other farming bodies have called for. I am happy to note that following my insistence and engagement with the former Minister for Finance, Deputy Donohoe, clarity was brought to this issue and the current Bill goes some way towards addressing these particular concerns. That said, I would like specific assurances that SMEs related to the agri-sector are not excluded from accessing much-needed finance under this Bill. This is incredibly important not only because the SME agri-sector has been hit by massive losses but because of the losses being experienced in the wider European context of a potential and highly damaging loss of CAP funding in future years.

We know that as a net contributor to the EU what we will receive in EU funding is likely to diminish considerably in the long term. It is important we have equality of access across the different economic sectors and agriculture should be no different. Rural sectors must not be disadvantaged in a way that would amount to competitive favouritism by any provision contained within this Bill. I note that one of the conditionalities associated with this Bill is that once the credit guarantee scheme is operational SMEs wishing to avail of the scheme will have to contact a participating Irish bank. I understand from an analysis performed by Mason Hayes & Curran that it will be up to the bank to make the necessary assessments and to decide whether it is prepared to grant a loan to the SME. Based on that Mason Hayes & Curran analysis it is highly likely that banks will require SMEs availing of credit guarantees to be of "good financial standing and commercially viable". This is extremely worrying. I am concerned that a number of SMEs, as a result of this criteria, will be locked out. It is abundantly clear from recent and historical experience that when we leave it to the banks to determine what "commercially viable" means, trouble inevitably follows for the small farmer, the small businessman or the small businesswoman.

There is also a need to bring clarity to how interest rates will be applied to the scheme. Again, as I understand it, a recent Government press release stated that credit guarantee scheme, CGS, loans will be made available at below market interest rates but the information available on the Department of Finance website and from some participating banks states that the interest rate is the standard SME interest rate plus a premium, which is currently 0.5%. I find that confusing. Which is it? We cannot have any profiteering off the back of this scheme by the banks.

I would like to mention the publicans. Last week was one of the most stressful for the 3,499 pubs that were due to reopen. The lack of consultation only compounded the issue. In my constituency of Laois-Offaly there are approximately 135 pubs affected. If even a fraction of them were forced to close permanently, this would represent a massive blow to an already struggling region that is undergoing radical disruption under the just transition process. The vintners have said that they will need grants of approximately €20,000 to €50,000 to survive. I support that call. What will this Bill do for those particular businesses that cannot contemplate further debt through loans, even low interest loans? It is clear that what we need is a whole-of-Government approach where no business is excluded. Everything from finance to the Department of Finance, local government and commercial rates must be brought into the mix if our SMEs and microenterprises are to survive and thrive.

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