Seanad debates

Tuesday, 29 November 2022

Credit Guarantee (Amendment) Bill 2022: Second Stage

 

1:00 pm

Photo of Ollie CroweOllie Crowe (Fianna Fail) | Oireachtas source

I welcome the Minister of State and thank him for his continued work.

Like many Senators, I welcome this legislation. As all Senators appreciate, and as the Minister of State alluded to, our SMEs are the backbone of the economy. There are 270,000 SMEs, accounting for 66.5% of all people employed in businesses. SMEs generate 44% of the total turnover in the business economy and 37% of gross value added is attributed to them. They are the majority of businesses in every county. They are our neighbours, family members and friends who run businesses in cities, towns and villages across the country. They are farmers, local publicans, restaurant owners and so on. Our economy is reliant on SMEs. Naturally, our society is also reliant on them.

Many SMEs have had a challenging period. They have endured trying to keep afloat during a global pandemic, operating during restrictions in most cases. Now, they are facing an energy crisis. Their sustainability is under threat, not through anything they have done, but due to external factors outside their control. I know this from speaking to business owners across Galway. This period is challenging for them and causing considerable concern and anxiety.

I concur with Senator Buttimer's remarks on energy costs. I will cite the example of a hotel in my city of Galway. It has 123 bedrooms and its energy costs for the six months of last year's winter season amounted to €124,000. The energy costs for this year's six-month winter season, which started on 1 October and will continue until March, will increase to €375,000. Long term, we need to co-ordinate a one-stop shop for hotels, restaurants, bars and the wider hospitality sector so that they can continue to operate. We also need long-term supports to help them make the necessary improvements to their energy systems. It is essential that the Government make every effort to support SMEs, as we have been doing in this context. I welcome this legislation, which will assist in that effort.

As Senator Buttimer and the Minister of State outlined, the Bill will make the necessary amendments to implement a specific Ukraine credit guarantee scheme. This will replicate many elements of the highly successful Covid-19 credit guarantee scheme, which saw more than €700 million in lending to nearly 10,000 businesses and helped to maintain more than 80,000 jobs in the 21 months it was available. The new scheme has the same potential to support thousands of jobs. With no sectoral or regional limitations, its widespread availability should see a similar uptake as the excellent Covid-19 credit guarantee scheme, under which 72% of loans were drawn down by businesses outside the capital. The State will guarantee 80% of the loans provided under the Ukraine credit guarantee scheme, with lenders retaining 20% of the risk to ensure they have skin in the game. Viable businesses will be supported. The Ukraine credit guarantee scheme will include primary producers such as farmers, fisheries and small mid-caps with under 500 employees.

Furthermore, I understand that progress has been made with the operator of the scheme, the Strategic Banking Corporation of Ireland, on lenders to prepare for a rapid deployment of the scheme. That is very welcome. It is essential that supports are rolled out, hopefully as quickly as possible following today's debate.

It is in every Member's interest to ensure every measure possible is taken to support SMEs. This initiative is one part of that and it should be welcomed and supported across the House.

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