Dara Calleary (Mayo, Fianna Fail)
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To ask the Minister for Jobs, Enterprise and Innovation the progress made regarding the uptake of the credit guarantee scheme and the microfinance scheme; his views on whether the pricing of both schemes is appropriate to the current economic conditions; and if he will make a statement on the matter. [9431/13]

John Perry (Sligo-North Leitrim, Fine Gael)
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The Deputy will be aware that both Microfinance Ireland, MFI, and the credit guarantee scheme began operating in October 2012. It is my intention that progress reports on the microenterprise loan fund will be published via the MFI website microfinanceireland.ie and updates on both schemes will be published on my Department’s website, enterprise.gov.ie, on a quarterly basis. Over 100 loan applications have been received by MFI, with 27 loans approved to date to the value of €427,000 supporting 68 jobs. MFI is currently actively promoting the availability of its loan fund and is focusing on a media campaign to raise awareness of the scheme across the country. Other options for promoting the fund are also being examined.

MFI was established as a private limited company with a board of directors. The directors have set the interest rate to be charged on loans under the scheme at 8.8%, taking into account a number of factors including prevailing market interest rates, the economic environment and specific risk factors.

The Deputy will know that lending to microenterprises is high risk due to the high failure rates with business start-ups, little or no track record, the fact that they were refused by banks previously, and no security available. Pricing of loans, therefore, tends to strike a balance between the support of new start-ups and the rapid erosion of the taxpayers' equity put into the scheme.

With regard to the credit guarantee scheme, there are currently 14 approved guaranteed loans resulting in €1.5 million of additional lending being provided to viable companies as of close of business on 15 February 2013. As a result of the sanctioned lending it is expected that there will be 113 new jobs created and 19 jobs will be maintained.

A premium rate of 2% is payable by the borrower. A rate of this nature had to be set to ensure the scheme complied with EU State aid rules and it was set at the lower end of the potential pricing spectrum, to which the Minister, Deputy Bruton, agreed.

In consideration of these categories, and recognising the current situation of the SME lending market in Ireland in the current economic conditions, it would be difficult to justify making the case for a premium rate any lower than 2% for a guarantee of this nature.

I will meet the board of Microfinance Ireland in the next two weeks on the microfinance fund. Also in the next two weeks I will meet representatives of Bank of Ireland, Ulster Bank and AIB who are managing the partial loan guarantee scheme for an update on that.

Peter Mathews (Dublin South, Fine Gael)
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There are four minutes overall for the questions and answers.

Dara Calleary (Mayo, Fianna Fail)
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I thank the Acting Chairman. That was a nicely done Dublin South turnaround in the Chair.

I raise a couple of issues. The 100 applications to the microfinance scheme is a healthy sign that is to be welcomed but when only 14 have been approved under the credit guarantee scheme it points to a serious problem in terms of awareness of it. When the Minister of State meets representatives of the banks he must bring it home to them that they must do a great deal more in raising awareness of that.

I am aware that in recent years the Minister of State has undertaken tours of the country with chambers of commerce and local business groups on access to finance issues. Would he consider doing that again? He has these two solutions in place but people simply are not aware of them. There is a common problem about awareness across the Department.

The poster boys for the Department, the exporters, are dissatisfied. A survey of exporters last year found that 51% were dissatisfied with the information provided on the application process for five schemes. There is no sense in putting so much work into putting those schemes in place if there is a general lack of awareness about them.

The Minister of State spoke about businesses that were previously refused by the banks and that used to be an acceptable excuse but given the level of refusals by banks, with many solid and healthy businesses being refused credit, it is unfair to price in a premium because a bank previously refused a business.

The most important point is that we need to build a greater awareness of these schemes.

John Perry (Sligo-North Leitrim, Fine Gael)
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I thank Deputy Calleary for raising these very important points about point of sale and engagement. As Deputy Bruton has stated recently, we are totally unhappy with the level of lending by banks, especially given that they have been recapitalised by the taxpayer.

On the issue of the micro-finance fund, there is a very active board in place. It has a charitable company status and is working very proactively with the enterprise offices in every county. I agree with the Deputy that is important to get out on the ground and encourage people to engage with the scheme. People must engage with the enterprise offices in places like Mayo, Sligo and Roscommon to even hear of this scheme.

Bank of Ireland, Allied Irish Banks and Ulster Bank have been guaranteed by this State and I am very disappointed that there has not been more proactive engagement on their part. I will deal directly with the banks to determine why the uptake of this scheme has been so slow. It is not good enough and we have been disappointed that there has not been a greater number of applications. I will certainly give the Deputy an update following the meeting with the banks. We will put an obligation on them to get involved and to give this money out to the business people who need it.

Dara Calleary (Mayo, Fianna Fail)
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I absolutely agree with the Minister of State with regard to the banks. In fact, I tabled a question asking for his opinion on the banks which was disallowed so I thank him for giving his opinion here that the banks are not lending enough. The two pillar banks have been recapitalised and given targets. The Minister of State is meeting business people every day and is in touch with what is happening on the ground and he can see what is happening. The Department of Enterprise, Jobs and Innovation must tell the Department of Finance to put the pressure on and to put the boot in because this is costing jobs. There is no sense in having all of these schemes and fancy plans if, at the end of the day, profitable and healthy businesses cannot get access to finance.

John Perry (Sligo-North Leitrim, Fine Gael)
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The Minister, Deputy Bruton, is actively engaging with the banks. The banks are now focused on domestic lending and they also need successful businesses. The onus is now on the banks to step up to the mark, especially in the context of the State guarantee. We expect a lot more tangible results from the banks and proof that they are actively engaging with business people. We have given them taxpayers' money. We want to create jobs and we can have all the plans in the world to do that but if people cannot get the necessary funding for vibrant businesses then jobs will not be created.