John Perry (Sligo-North Leitrim, Fine Gael)

I welcome this opportunity to present the Credit Guarantee Bill 2012 to the Seanad. The Bill is one of the key targeted actions in the Government Action Plan for Jobs 2012 to address access to credit and support lending to SMEs, and will, I believe, prove to be a practical way of facilitating additional lending to SMEs. This is not a grant nor a support for ailing businesses. It is a scheme intended to address specific market failures that prevent bank lending to some commercially viable businesses, by providing a 75% guarantee to banks against losses on qualifying loans to job creating firms. The target beneficiaries are commercially viable SMEs, that is those which display a repayment capacity for additional credit facilities, but that cannot secure credit facilities under current conditions due to two market failures, namely insufficient collateral or lack of appreciation by the credit institutions of the growth-expansionary business model.

I would like to present some background on the rationale for introducing a credit guarantee scheme for SMEs. In February this year, the Government launched a range of measures under the Action Plan for Jobs to improve the competitiveness of the economy, to improve supports for job-creating businesses and to remove barriers to employment creation across the economy. Every Department and over 35 agencies and offices of the State are engaged with actions to support jobs which will be delivered in this calendar year.