John Gilroy (Labour) | Oireachtas source

I welcome the Minister to the Chamber and welcome this Bill which will be a central plank in providing SMEs with access to funding. Senator D'Arcy said that one criticism of the Bill is that it is only now coming before us. It is a pity we did not have it a year or two ago, but the fact we had no money is probably the answer to that criticism.

It is worth reminding ourselves that 70% of people working in the Irish economy are employed in the SME sector and anything we can do to support the sector must be welcomed. SMEs face structural difficulties and problems in accessing finance that larger corporate companies do not face. Last year, after the Taoiseach announced this proposal in talks with Angela Merkel, it was decried by many and they described it as a second bailout. There was all sorts of nonsensical talk and the SBCI was greeted by some commentators and some Members here as a bad thing. I hope those who were negative at that time will reflect on what we are doing through this Bill and agree it is necessary and should be welcomed. However, we will not dwell on the past.

Senators Barrett and O'Brien have made most of the comments I would like to make, so I will not repeat them, but I have some other comments to make. The Minister said in his speech that the maximum amount of SBCI funding that can be given by the State is €5 billion. How and why did the Minister arrive at that particular figure? Senator Barrett has spoken a lot about the corporate banking culture.

I share all of his concerns about this matter.

I have a number of questions for the Minister. What mechanism will the SBCI put in place to ensure the retail banks lend to SMEs? Will it use a dual assessment structure to monitor how the banks lend money? If, in the context of a bank's own lending criteria, an SME is considered to be an unattractive risk, will it be automatically debarred from borrowing money under the scheme proposed in the Bill? Will there be two mechanisms in place to allow people to borrow money or will it be a single mechanism? How will the position be regulated in order to ensure the banks are actually lending? Is there a danger that this new structure will displace any of the financial products already available from the retail banks? Is there a risk that it might be perceived to be against a bank's interests to lend money under the SBCI scheme at a rate that is lower than that which applies to its own products? I accept that there may not be a risk in that regard and that there may be no concerns about this matter. However, if there is a risk, what mechanism will be available, either under the legislation or by means of regulations, to ensure the banks will lend the money as intended?

I will not repeat what previous speakers stated. The Bill is very welcome, but there are some concerns about what is proposed, particularly as the retail banks have not covered themselves in glory in the past seven or eight years. I was approached recently by several people who run their own small businesses and outlined how difficult it was for them to access credit from the retail banks. When representatives from the banks come before the Joint Committee on Finance, Public Expenditure and Reform, they state there is no problem at all, that their lending rates are fine and that they are meeting all of their targets. The Central Bank of Ireland appears to agree with them, yet the reality for certain customers seems to be at variance with this.

The Bill makes provision for a very welcome initiative that will give support to SMEs. Perhaps the Minister might outline his opinions on the points I have raised.