Mary White (Fianna Fail) | Oireachtas source

I thank the Minister of State for his wide-ranging presentation and wish him continued success with his portfolio on small and medium business. As we have said here many times, SMEs are major contributors to the economy in Ireland and employment. The importance of these firms cannot be underestimated. Of the 195,000 SMEs in Ireland that involve just over 850,000 people, 90% employ fewer than ten people. While many SMEs focus exclusively on the domestic market, a large proportion trade on international markets. There is potential for so many more firms to internationalise and this could be made a reality if they were to receive better financial banking from the banks. Over 70% of SMEs are involved across a broad spectrum of products, such as software, medical technologies, food production, digital content, retail and wholesale, and tourism.

As we have said previously in the House, SMEs are present in all regions and contribute to building a community while enhancing a location's attractiveness as a place to live and do business.

European SME week is to take place from Monday, 15 October to Friday, 19 October. The campaign is co-ordinated by the European Commission, which focuses correctly on promoting SMEs in 37 countries across Europe. Events have been organised throughout the country by Enterprise Ireland, the city and county enterprise boards and business organisations to enable existing businesspeople to share their experience with potential entrepreneurs and develop further their own businesses.

On Friday last, I had the pleasure of attending an event associated with the first ever National 50+ Enterprise Day, which was launched by the Minister of State and organised by the city and county enterprise boards. Over 55 potential entrepreneurs were in attendance. The driver of this fascinating initiative is Mr. John Byrne, who has made the idea of senior enterprise acceptable and attractive. I never heard of the concept of senior enterprise until last Friday. Senior enterprise has been approved recently for support by the European Union through INTERREG IVB, an EU initiative that aims to stimulate inter-regional co-operation. Senior enterprise is specifically designed to encourage greater involvement with enterprise by people over the age of 50. This may be achieved through starting a business alone or with others, acquiring or investing in a business and advising an entrepreneur or supporting innovation within a business owned by another person.

National Women's Enterprise Day is to take place on 17 October, with an event in Portlaoise. I have been honoured to have been invited by Ms Sarah Reilly of Fine Gael, a town council chairman, to speak at a very influential conference on women leading the way. In particular, I have been asked to speak about my business and political experience in order to empower other women to do as I did.

In spite of the recession, it is most heartening that so many Irish men and women are taking the risk of starting their own businesses. I commend Enterprise Ireland and the various relevant organisations that do such sterling work on prompting support for small businesses starting out and larger, more established businesses. The good news is that so many Irish men and women are willing, in the middle of a recession, to start up businesses. It takes courage and one must be able to take risks. One must be a gambler because the chance of a business surviving is very low.

It was with much amazement that I read in the Irish Examineryesterday morning a one-to-one interview with the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton. Bearing in mind all the occasions on which I referred in the House to banks not lending money and his reply that they are doing so, he is quoted in the article as saying banks have recoiled completely from lending to small businesses. I will be fascinated to hear what Senator Clune will have to say about that. The Minister stated that we must "retool the whole finance system". Furthermore, he stated: "You've seen the credit figures yourself - banking has completely recoiled from lending to small business. That has to be rebuilt." The good news outlined by the Minister is that we can ?with absolute confidence point to more high-potential start-ups this year?. He has moved from referring to job numbers under the action plan for jobs to talking about the number of potential start-ups. This is a good yardstick.

As the Minister of State will know, the ninth report of the Credit Review Office, CRO, was released yesterday. It shed more light on the reality of bank lending to SMEs and farms. Mr. John Trethowan, the credit reviewer, outlined the activities of his office since his last report, in June, and highlighted his observations on the market conditions in the SME sector.

Until Mr. John Trethowan's ninth report, the CRO believed the banks' assertions that they were lending money. The banks got a shock when he disagreed with them after approximately 18 months.

Mr. Trethowan criticised the banks for not lending, something that the Central Bank has stated in three reports. In his report, he urged business people seeking loans to make formal written applications and stated: "Much work has been done to standardise the information required for a loan application". In many banks, a business person who asks for a loan to expand a business is told by someone in the branch not to bother because he or she would not get the money. Mr. Trethowan has learned of such incidences. According to him, people should make formal written applications and not be put off by their local branches. It is important that small and medium-sized enterprises, SMEs, and farm owners not be dissuaded from applying for credit by the comments or actions of a few front line bank staff or the media.

I raised the crunch issue on the Order of Business. The banks claim that they loaned ¤3 billion last year and will loan ¤3.5 billion this year, as they were asked to do. How much of that amount is for risk taking in business rather than, for example, increasing overdrafts or safe customers? Is it just a rolling over of credit, which is useless? This matter must be addressed urgently.

What is the Minister of State's opinion on the comments of the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, in the article referred to? I imagine that the Minister regrets what he has been saying for eight or nine months. Senator Mullins has discussed the issue. How does he view the Minister's statement that the banks are not lending money?