Ollie Crowe (Fianna Fail) | Oireachtas source

I welcome the Bill, which is a welcome one for SMEs. Before I commence, I thank the Minister of State, Deputy English, for coming into the House and for his detailed overview of the Bill in the past ten to 12 minutes.I also thank the Minister of State, Deputy Troy, the current Minister with responsibility for business, Deputy Varadkar, and the previous Minister, Deputy Humphreys, for their work during this difficult time in respect of SMEs.

As all public representatives will be aware, Covid-19 has been devastating not only for society, but also for our economy. As the Minister of State outlined, no cohort has been more impacted than SMEs, which are the heartbeat of the economy. They comprise 99% of all active enterprises and, one year ago, employed 1.3 million people, representing more than 50% of our workforce. Many people throughout the country have dedicated their entire working lives to building up their businesses, but through no fault of their own, the pandemic has seen them close for a long time.

SMEs are a vital part of communities and villages across the country. It is essential that the Government assists these businesses and the families that depend on SMEs. I will certainly play my part. I spoke to the Minister for Public Expenditure and Reform, Deputy Michael McGrath, about the July stimulus package earlier this week. There is an opportunity in this regard, but there are also major challenges. Naturally, it is imperative that the TWSS be extended. There seems to be an understanding that that must happen, which is welcome.

The UK applied a significant reduction in its VAT rate this week. Herein lies the challenge, and the situation must be examined. In urban areas of Galway, particularly the city centre, ratepayers face significant challenges. The increase in the number of vacant units on high streets and main thoroughfares is worrying. We must act now. It is vital that we get the July stimulus package right.

I will make a couple of points on the Bill. I speak to SME owners every day. This legislation is urgently needed and will be of considerable benefit to the enterprises that fall under the definition of "micro" - nine staff or fewer and an annual turnover of less than €2 million - and find it difficult to access commercial lending from other sources. Microfinance Ireland announced a fund of €20 million for microenterprises affected by Covid last March. It was to provide loans of up to €50,000 with a six-month interest and repayment moratorium. By 26 June, 581 loans had been approved, amounting to €16 million. That only 452 loans amounting to €6 million were approved by Microfinance Ireland during 2019 puts the situation into context. The fund is not currently in a position to take further applications, which emphasises the need for us to act urgently, as the Minister of State has outlined.

As our economy continues to open up, it is stating the obvious that demand is almost certain to increase. It is vital that SMEs can access credit. This legislation will play an important role in ensuring that credit is available. The criteria specify that the fund is for companies unable to access credit elsewhere. For various reasons, many viable businesses are finding it difficult to access credit. It is incumbent on the State to make funding available to such companies at affordable rates. The enhanced funding for Microfinance Ireland will assist microenterprises and other small companies.It is important to highlight the need for regional balance. We hear references to it every day. It is welcome that 79% of the loans that were granted in the past 12 months were outside Dublin because local economies are more reliant on SMEs. It is worth noting that nearly 80% of the funding has been outside Dublin and that is very important for the economy in the west and throughout the country.

The legislation will permit Microfinance Ireland to raise funding through the Strategic Banking Corporation of Ireland, SBCI. That significantly strengthens its funding model and allows access to relevant European Investment Bank funding through the SBCI. Aside from the importance of Microfinance Ireland as part of the overall response to assist small and medium enterprises that are struggling as a result of the Covid crisis, it has shown a steady growth over the seven years of its existence with a 7% increase in loan applications last year reflecting this. The legislation will allow Microfinance Ireland to continue that growth and to assist smaller businesses to be in credit, which is vital because the funding is required now. We hope that the receipt of such credit by SMEs will help them to survive and families and the economy overall will benefit as a result of that. The legislation will assist companies to bounce back from this pandemic. The Bill is essential and I hope it will be passed by Senators this afternoon.