Trevor Sargent (Dublin North, Green Party)

It should also be noted that the Irish League of Credit Unions maintains a savings protection fund in excess of €100 million which is available to help stabilise the position of any credit union that encounters problems.

At the heart of social finance is the concept of repayable loan financing provided at affordable terms for community-based projects and enterprises and local development initiatives. The objective is to provide access to credit for projects that would not be able to access loan finance from the mainstream financial system. Social finance encompasses the provision of micro-credit particularly for small enterprises. The key difference between social finance and commercial lending lies in the fact that social finance considers the wider social benefits from a social finance project going ahead.

Responding to two important reports advocating the development of social finance, Social Finance in Ireland launched by the then Taoiseach in September 2003, and In the Common Interest — the Case for Social Finance, the then Minister for Finance announced in the 2006 budget a commitment to launch the social finance initiative so as to enhance the availability of loan finance for social and developmental projects in local communities. The social partnership agreement Towards 2016 endorses the establishment of the Social Finance Foundation.

The initiative has been implemented through the establishment of an independent wholesale social finance provider, the Social Finance Foundation, which was launched by the then Minister for Finance in February 2007. The foundation was established on a not-for-profit basis to act as a wholesale supplier of social finance for on-lending by specialist social lending organisations to support social and developmental projects and social enterprise in local communities. The foundation is a private company established under company law and is governed by its board of directors under its memorandum and articles of association.

On its launch, the foundation received seed funding of €25 million from the banking sector for distribution to qualifying social lending organisations, SLOs, that on-lend to individual social finance projects. Several organisations have been accredited by the foundation as SLOs. As of December 2008, loans totalling €9 million have been approved by the foundation, of which €5.4 million had been drawn down, including a number of micro-credit loans.

The primary objective of the foundation is to use social finance to support social and developmental projects in communities and social enterprise. The foundation acts as a wholesale finance supplier providing repayable capital to social finance lenders who in turn lend to individual social and community projects.

By providing loans on a wholesale basis to SLOs that have the capacity and skills to manage lending to individual projects, the foundation will act as a catalyst for the further development of the social finance concept in Ireland. The Government's intention is to stimulate the potential present in our communities to ensure the quality and standard of local social and community infrastructure can be on a par with our level of economic development.

Towards 2016 endorses the establishment of the social finance foundation and provides that it will engage with and support existing providers, agencies and established networks of social finance providers and any new providers emerging from the sector. The foundation, in conjunction with relevant interests, is also examining ways to progress the investment of capital in social finance providers by charities, private individuals and businesses.

Several voluntary organisations have been active for some years in the area of social and micro-finance. For example, Clann Credo and First Step have each supported a wide range of projects with social finance. First Step has specialised in providing micro-finance to projects that cannot access funding from other sources.

The foundation is independent of the Government, although the Minister for Finance is responsible, for example, for nominating the chair and must consent to the appointment of directors. The Government, which has worked to facilitate the development of social finance, intends that the experience gained from the foundation's activities will help to guide the development of social finance in Ireland. Through the initiatives I have outlined to increase the flow of credit to the small and medium-sized enterprise sector, the actions of the Government are fully consistent with the objectives of this motion.