Nicky McFadden (Fine Gael)

I will share time with my colleague, Senator John Paul Phelan.

I agree with Senator Norris's remarks about a combination of the two motions. While microfinance is very important, especially at this serious time of recession, there must also be proper legislation in place so the regulator can regulate. That is his job. What is wrong with this country is that when a regulator is employed, they do not do their job. We must put the right legislation in place. The Minister is open to doing that and I welcome his response. I look forward to hearing his proposals on how to put legislation in place to give the regulator more power.

Credit unions are there to provide small loans for ordinary people. It really saddened me in the past couple of days to hear the size of loans that have been given to people and even — I am sorry to use the "D" word — to developers and speculators. These are now unable to pay back the loans and are causing difficulty for our credit unions. I resent that. Mr. Logue was quoted as saying in a letter that there is no contingency plan with regard to Mitchelstown. Will the Minister explain that? I accept there is a State guarantee of €100,000 in place for depositors but what would be the regulator's contingency plan if a credit union were to go out of business?

I support Senator O'Toole's and my party's amendment relating to liquidity. How can the credit union operate if there is no liquidity or capital to lend? Last year there was a run on a credit union, where moneys were taken out in a hasty manner. I am concerned that would happen again. As in the case of the banks, the Government needs to give leadership and reassurance to people that this will not happen. I strongly support the essence of the motion, that is, to provide microfinance for small and medium size enterprises. Credit unions are a good means of achieving this objective.

Senator Hanafin referred to small community groups. The Athlone community task force, with which I was involved, was one such organisation that offered small revolving loans. These were highly beneficial and the group received funding from the Department of Social and Family Affairs and Pobal. These types of initiatives, most of which were established in the 1980s but became virtually defunct in the past decade, are badly needed again. Capital needs to be provided to small businesses, those who wish to establish a small company and business start-up courses. I support the amendment.