James Reilly (Fine Gael) | Oireachtas source

I welcome the Minister to the House and I also welcome the Bill. The Bill is an important part of preparing for Brexit and Brexit-proofing arrangements for businesses, which will face challenges. As the Minister knows better than most, SMEs are critical to our economy. They are the beating heart of the economy and of communities. They are working in an ever-changing, rapidly moving market nationally and internationally. Innovation is essential if a business is not to lose its place in the market quickly.

I wish to speak not only about what Senator Davitt mentioned, namely, the need to make businesses aware the scheme is available and the need to minimise any red tape or obstruction that makes dealing with financial institutions difficult, but also about the interest rate on the loans. The rate will be critical to their attractiveness. What collateral will businesses have to put up?Will the Minister comment on what the requirements are likely to be if she is in a position to do so?

I would like to speak of the lack of competition with regard to financial institutions in the country. It was clear to us at the Joint Committee on Business, Enterprise and Innovation that businesses were finding it difficult to access money and that the pillar banks are of a particular nature and do not by any means suit everybody. Some of us on that committee went to Germany to visit Sparkassen banks to see what they do. They offer rates of 1.5% and lend anything between €5,000 and €50 million, always within their own area. They are community-based banks. It is critical that we have a similar type of bank available to small businesses in this country and, considering the sums they lend, not-so-small businesses. They have survived two world wars, depressions, etc. They have been in business for 200 years. They are old-style banks where people go to visit the farmer on his land or the business person in his workplace, factory or wherever he might be, understand him and his community and the nature and real risks in business. Much of that has been lost in Irish banking because of the over-emphasis on property and property development up to the crash. If there was any doubt about the fact that there is lack of competition, when Mr. Mario Draghi appeared before the committee and everyone asked why rates are so high here, he gave the same answer repeatedly, which is that there is a lack of competition. I wish the Minister well with this. It is part of an important set of arrangements but we need to do more. The Government needs to look at how we could encourage a facility such as Sparkassen in this country. They do not ever set up banks in other countries. They merely give advice on how to set them up and the ethos behind them. It is badly needed. In the past, when we had ACCBank and the other small bank for industry, many businesses were started that could not get access to finance elsewhere. I welcome this. I give it my full support and look forward to its rapid passage through the House.