Rose Conway-Walsh (Mayo, Sinn Fein)
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1. To ask the Minister for Enterprise, Trade and Employment the measures he is taking to ensure that small- and medium-sized businesses can access affordable credit and avoid being burdened with high borrowing costs; and if he will make a statement on the matter. [51024/25]

Rose Conway-Walsh (Mayo, Sinn Fein)
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Will the Minister outline the measures he is taking to ensure small- and medium-sized businesses can access affordable credit and avoid being burdened with high borrowing costs? Access to affordable credit is a significant barrier to our SMEs that want to expand and grow their market share. As they try to navigate their way around all of the challenges they face, they need access to credit.

Peter Burke (Longford-Westmeath, Fine Gael)
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I thank Deputy Conway-Walsh for this very important question. I firmly commit to ensuring that small- and medium-sized businesses have access to affordable credit. My Department has developed several loan guarantee schemes, the first in 2012, that have enabled participating lenders to offer loans at interest rates below their standard commercial terms.

The scheme currently open to SMEs is the growth and sustainability loan scheme. This is a €500 million initiative developed by my Department and the Department of Agriculture, Food and the Marine, underpinned by a partial guarantee from the European Investment Bank Group and the Strategic Banking Corporation of Ireland, SBCI. The SBCI also operates the scheme. This scheme offers long-term loans ranging from €25,000 to €3 million, with terms of up to ten years, to SMEs, farmers, fishers, and small mid-caps. Loans of up to €500,000 are available on an unsecured basis, making finance more accessible for SMEs.

Interest rates under the scheme are determined by each participating finance provider, in accordance with its own credit policies. However, all rates must reflect the benefit of the EU-backed guarantee and SBCI support, ensuring they are below standard commercial lending rates. In practice, participating lenders offer discounts ranging from 1% to 4.86% compared to their equivalent SME loan rates, making credit more available. A minimum of 30% of the scheme's lending is targeted at environmental sustainability and climate action, with the remainder supporting productivity and competitiveness. Loans for climate-related purposes also benefit from an additional interest rate discount.

As of the end of June, 1,930 loans had been approved, amounting to €432 million, by my Department and the Department of Agriculture, Food and the Marine. We are negotiating with the EIB Group and the SBCI on the potential to extend the duration and expand the capacity of the loan. I plan to bring proposals to the Government in the next three months.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I welcome these initiatives but last year, in 2024, we saw no real growth in Ireland's SME bank debt, with continued low demand from applicants and an overly cautious approach to risk from the banks. SMEs with any form of credit challenge find it difficult to access credit from the traditional financial institutions, even more so since the departure of Ulster Bank and KBC from the market. These are the sources where most small and retail businesses go to look for credit. Despite what the Minister says he is doing to make credit more accessible for SMEs, a recent report from IBEC revealed that 63% of SMEs still consider the application process to be overly complex and lengthy. Many SMEs do not have the knowledge and expertise to navigate the overcomplicated process of securing finance, even more so now that the banks have automated their application processes and removed all human interaction with local bank managers who would have traditionally advised and assisted a struggling applicant.

Peter Burke (Longford-Westmeath, Fine Gael)
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To go back to the evidence, if we look at the first scheme I referenced, which was the growth and stability loan scheme, we have at this point in time almost used up the €500 million allocation. This demonstrates that SMEs are using it and drawing it down. We also increased the Microfinance Ireland loan scheme for our smaller SMEs, up to €50,000 from €25,000, and it is supporting approximately 12,000 jobs in the economy. We have had a succession of schemes, including the Ukraine guarantee scheme, the future growth and loan scheme and the Brexit loan scheme. A huge amount of low-cost finance has been provided. We are also renegotiating to extend the €500 million and increase its capacity and keep it competitive.

I also point out the Department of Finance recently conducted a survey of SMEs and only 6% of them cited the cost of finance as an issue in terms of getting support. We are reducing the conditionality of all schemes to make it easier for SMEs to go through the application process. This is very much to the forefront of my mind in doing things simpler, lighter and faster.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I welcome this. The problem sometimes is that many of these systems are automated and somebody may not have an absolutely clear record. There can be many reasons for this which are explainable, and at one time people could have gone in and sat down with the bank manager to explain the reason something happened and they could come to an agreement. This was also the case for people with good creditworthiness. This is something that needs to be looked at.

With regard to the length of time it can take to draw down credit, I wonder whether any analysis has been done on situations where all of a grant is drawn down by one cohort of people while another cohort of people, such as those coming to our constituency offices, find it very difficult. We need to be conscious of this and ensure we bring all businesses with us and ensure the sustainability of all businesses.

Peter Burke (Longford-Westmeath, Fine Gael)
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I am very happy to work in this regard. The critical thing I am trying to do is make these supports available to our SMEs and family businesses, which employ two thirds of the people throughout our economy. I am very aware that the average SME does not have a finance director or a HR director. A lot of the great work is done around the kitchen table. This is why we are working with the centre of excellence at Enterprise Ireland and those who craft the schemes so we are reducing red tape and the administrative burden. Particularly for some of the lower-scale grants, such as with regard to digitalisation or sustainability supports, which can be less than €10,000, we should be able to turn them around in 24 hours. This is my target for the agencies. We are working to deliver this. There are other methodologies we can bring in to get efficiencies and ensure we are really supporting them at the forefront. The cost of doing business advisory forum is working with a lot of the regulators and their interoperability among the sectors. What they ask of various applicants may already have been asked in other areas and we want to get a floor under this and reduce the administrative burden.