Dara Calleary (Mayo, Fianna Fail)
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3. To ask the Minister for Jobs, Enterprise and Innovation his views on the operation of the credit guarantee scheme to date; when it will be re-vamped to improve its take up; and if he will make a statement on the matter. [23850/14]

Dara Calleary (Mayo, Fianna Fail)
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As I introduce my second question of the morning, I ask the Minister to have some respect for the Chamber and to update Members on the Bausch and Lomb issue. We have been trying to raise the matter but it was too late to table a question for this morning's business. It is a serious industrial issue and perhaps the Minister can update the Chamber.

With regard to the credit guarantee scheme, this is the baby of the Minister and he knows it is not working. It will take 48 years to reach the target on the basis of the current roll-out.

It is indicated in the legislative programme that amending legislation is intended. Can the Minister provide us with a flavour of that legislation and the changes it will involve?

Richard Bruton (Dublin North Central, Fine Gael)
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I am quite happy to update the House on the situation in Bausch and Lomb, but I am not sure it is in order.

Michael Kitt (Galway East, Fianna Fail)
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It is not in order. We must deal with the questions that are put down.

Dara Calleary (Mayo, Fianna Fail)
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We tried to raise it as a Topical Issue matter.

Richard Bruton (Dublin North Central, Fine Gael)
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I replied on an Adjournment matter in the Seanad last night. There is no reluctance on my part to respond. I have met with Deputies and have been trying to accommodate the House.

The SME credit guarantee scheme, or CGS, was established under the Credit Guarantee Act 2012 to address specific market failures in lending to SMEs and in response to calls from business interests. It is a novel scheme in an Irish context and is continuing to develop a position in the Irish financial arena. My Department, the CGS operator, Capita, and participating lenders have committed significant time and resources to the establishment and operation of the scheme. While demand for the scheme has been lower than anticipated, the figures as at 31 March 2014 show that it has nevertheless supported additional lending of some €11.7 million to 89 enterprises and supported 479 new jobs, while maintaining 255 jobs. This is lending and employment which would not be in place had the scheme not been implemented.

The recently completed review of the scheme has recommended some changes which should lead to increased take-up. We are nearing completion of the review process, having consulted widely with stakeholders on the proposed changes. I will shortly bring a memorandum to Government seeking approval to amend the Credit Guarantee Act. I am confident that the necessary legislative amendments will be made by the Oireachtas in the coming months with a view to the earliest possible implementation of the necessary changes.

Dara Calleary (Mayo, Fianna Fail)
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We have been pointing out the difficulties with this programme for some time. The Joint Committee on Jobs, Enterprise and Innovation is currently discussing SME financing and had the pillar banks in a couple of weeks ago. We got the sense that this was an add-on and that the credit guarantee scheme was not being taken seriously. This was something that was there but the banks were not pushed by it. When one looks at the target announced in October 2012, it was €450 million over three years. We have got to €11.6 million since then. All the indications are that the scheme is not working and no amount of tweaking will change it. It sends a bad message about the new State investment bank announced in the run-up to the local elections.

Does the Minister see the legislation being introduced before the recess? What was the flavour of the review? What weaknesses and difficulties were identified which will be reflected in the legislation?

Richard Bruton (Dublin North Central, Fine Gael)
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I am happy to discuss this further with the joint committee. To be fair, this was something that was considered in the Department during the term of the previous Government and not implemented. We decided to take it on. It is novel. The changes people have spoken of involve looking at the range of lending products the scheme covers, the range of lenders who can participate, the duration of loans, the level of loans and the caps that operate. Those are the sort of changes that are being considered.

I look at the experience of other countries with these schemes and they have had difficulties in implementing them. We are not alone in finding it difficult to roll out successful schemes of this nature. We are seeking, however, to improve it. It is fulfilling an important requirement and if we can expand it to make a greater impact, my ambition will be fulfilled. For those who have benefited, it has been useful.

Dara Calleary (Mayo, Fianna Fail)
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I have no doubt people have benefited, but €450 million has been budgeted for the scheme. Another scheme I have pointed out to the Minister, which has the support of the joint committee and of many Members in the House, involves crowd or source financing. We have been encouraging the Minister to put a pilot scheme in place. Surely, money is going to waste while we wait for a review of the scheme. As it cannot now deliver €450 million, it would be sensible to put a source financing pilot scheme in place using some of the money from the credit guarantee scheme. That would probably have a greater impact on job creation and enterprise development.

Richard Bruton (Dublin North Central, Fine Gael)
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The budget in this regard is in respect of losses that might be incurred. We have not budgeted for the lending by the banks. We have budgeted for losses which might have to be met. Crowd-funded financing is certainly worth looking at. I understand the scale at the moment would be tiny, however, and much tinier in any event than the credit guarantee scheme. While there is merit and the matter is being examined in the context of the review of various seed capital and other schemes by the Department of Finance and my Department, we need to see many different instruments. We have been too reliant on a very narrow range of banking products and need to see a broader range of instruments to support business start-up and growth. Crowd funding can have a place in that.