John Perry (Sligo-North Leitrim, Fine Gael)

I thank Senators Mary White, Deirdre Clune, Feargal Quinn, Jimmy Harte, Kathryn Reilly, Imelda Henry and Rónán Mullen for their contributions to the debate. The issue under discussion is one of the most important for small business in Ireland and has been identified as mission-critical by the advisory group on small business. The Bill reflects the fact that the Government is listening to businesses and willing to act in a positive and supportive way, even in difficult and restrictive economic and financial conditions.

On Senator Mary White's point, this is a start-up fund which will be reviewed. The Senator welcomes the establishment of the fund for entrepreneurial women involved in business. It is not just about giving money but also about mentoring, skills development and management. It will be closely evaluated by officials in the Department.

The Bill has taken time to reach the floor of the House and as such, I acknowledge the frustration of many at the delay in processing it. However, this is a completely new policy area for my Department and it has taken time to overcome the issue.

On the administrative structures to be used, the legal concerns and the point made by Senator Deirdre Clune about the role of the Credit Review Office and Mr. John Trethowan, the banks have ring-fenced a sum of up to €7 billion for businesses. Senator Feargal Quinn has made the point that people should make applications because there is a new, simplified bank application form that will be common to Bank of Ireland, Ulster Bank and AIB. People can also appeal credit decisions, even though many do not, within their bank and to the Credit Review Office. We should engage with Mr. Trethowan who has overturned one in two decisions. Senator Deirdre Clune welcomed the Silicon Valley alliance and made the point that the Credit Review Office should be used effectively.

The Bill is targeted legislation to address the needs of the most vulnerable elements of the SME sector, microenterprises. It will ensure additional lending to businesses in the locally traded and export sectors and deliver real outcomes in terms of job creation. The fund will help firms with the potential to generate growth to realise it and meet some of the unmet demand for microfinance. It will have a greater risk appetite than banks could possibly ever have, which is important. It will also be able to fund microenterprises that cannot satisfy conventional bank criteria.

On Senator Jimmy Harte's point, loans will not be bounded to any degree. The applications must be backed up by a business plan showing the purpose and sustainability of the enterprise. I listened actively to what the Senator said and a one-stop-shop will ensure it is about more than just providing money; it involves staying and working with applicants and mentoring. Previously, the banks just gave out money and when there was a problem, they came looking for it.

Many successful business people whom I know would love to give something back to Ireland. This is a real opportunity, when the local enterprise offices are established, to make a call on people who are semi-retired and have business experience. We can tap into their expertise. We are eager to work with applicants who have viable proposals. There will be huge merit in a system of independent evaluations. As I said, there are successful professionals, including legal professionals, who are very well off and want to give something back. I am very much aware of the generosity of Irish business people.

Senator Feargal Quinn made reference to crowd financing. That is a fantastic idea and I would be keen to obtain more information from the Senator in this regard. I understand it has proved very successful in the United States in terms of facilitating credit flow to small companies. The Department is examining how it can improve access to finance for all businesses, including a review of all aspects of seed and venture capital schemes. The United States experience in regard to crowd financing offers a useful model in terms of encouraging people to invest and take a risk in new businesses. It is a very interesting concept.

In regard to the PRSI contribution, the Minister, Deputy Burton, is examining proposals whereby self-employed persons whose businesses fail would have some entitlement to benefit. That is under active consideration by the Department.

The loan fund is not designed to replace current bank lending but to aid economic recovery by facilitating creditworthy borrowers to deliver jobs across the economy. The aim is to assist enterprises in their endeavours with a view to generating approximately 8,000 jobs. Many small business owners are telling us that they have no confidence in approaching the banks for finance. Some feel their application will be refused even before it is made. The measures contained in the Bill will encourage greater confidence in the banking network. The banks have committed to lend €7 billion this year and €8 billion next year. If these measures help to generate 8,000 jobs per year in the coming decade, that will be a huge achievement. We intend to monitor progress closely and to ensure the targets are kept clearly in focus. What is proposed in this legislation represents an effective use of State funding, with the cost per job working out at the lowest end of the scale.

The Bill provides for the establishment of the microenterprise fund and the formation of a private company to lend to businesses and manage the fund. We are confident this will stimulate activity in the economy by providing the necessary support to sustainable microenterprises. The targeted nature of the initiative will see loans of up to €25,000 provided for commercially viable enterprises which do not meet the commercial banks' conventional credit criteria. We expect the average loan to be sizeable, probably in the region of €16,000. That will have an immediate impact. The main aim of the fund is to ensure the microenterprise sector remains vibrant by helping to nurture the entrepreneurs of the future who will go on to create jobs in the economy. Senator Imelda Henry, who has a great deal of business experience, emphasised the importance of recognition, support and encouragement for small businesses. That is what we are about. This Bill is one of a suite of initiatives to encourage and support people who are willing to take the risks necessary to build and grow something worthwhile for themselves and others.

I agree with Senator Rónán Mullen that it is very much about confidence and credit. We must create confidence in the domestic economy so that people are willing to spend locally. We are doing fantastically well in terms of foreign direct investment and exports are thriving. The recent report by IDA Ireland shows the extraordinary results in this area. Indigenous companies are also doing exceptionally well but we recognise the need to support them. In a €90 billion economy, €11 billion is being saved. It is about restoring confidence in the future so that people will begin spending once again in the domestic economy. This Bill will certainly help to restore confidence and credit. I agree that both are equally important.

Some have expressed the view that this initiative is too little and too late for the SME sector. On the contrary, the measures contained in the Bill represent a timely response to the real needs of businesses. We could all sit back and list ten reasons that something cannot be done. We are interested in taking effective action. There is a well known saying that if there is no problem, there is no business. This initiative will not solve all the problems facing the indigenous business sector or create all the jobs we need, but it will create an environment in which small enterprises are supported to grow and create employment. As I said, the Bill represents one component in a suite of measures introduced by Government to facilitate the flow of credit to small business. It is one of several steps that will help us out of the morass into which the actions of others have condemned us. It should be considered in combination with the temporary partial loan guarantee scheme and all of the measures contained in the action plans for jobs. All of these initiatives are a clear indication of the Government's desire to address our problems in a manner which represents real value for taxpayers' hard-earned money. Moreover, we will listen to any proposals that might meet that objective, and my door is very much open to any Senator who wishes to make a submission. We are seeking ideas that will make a real difference. Business people want straight talk, effective action and tangible results. This Bill represents an important step in helping people to secure the necessary financing to build and expand their businesses.

I thank Senators Mary White, Deirdre Clune, Feargal Quinn, Jimmy Harte, Kathryn Reilly, Imelda Henry and Rónán Mullen for their contributions. I have listened carefully to their proposals and am more than willing to consider any feasible suggestions. I look forward to the debate on Committee Stage next week. Enacting this Bill will allow us to get on with the business of lending to this critical sector of the economy.