Thursday, 28 January 2016
Credit Guarantee (Amendment) Bill 2015: Report and Final Stages
I thank Senators for their consideration of this Bill and constructive contributions, as well as those of my Dáil colleagues. As regards the original 2012 legislation, the Government faced an economic and employment crisis and the plight of SMEs was never far from its mind. SMEs account for most employment in this country and were starved of finance, a major challenge for the incoming Government. It responded on many levels, including the establishment of Microfinance Ireland, the SBCI and the Credit Guarantee Act 2012. These were coupled with enterprise-oriented budgets to deliver an economic recovery. We are now seeing the benefits of these actions.
However, we did not leave it there with the 2012 Act. We kept the operation of its schemes under review. The review stated in school report parlance that we could do better. Accordingly, we responded with the propositions in this legislation to make the credit guarantee scheme work better. I am sure we will see the benefits of the changes in the years to come. The Action Plan for Jobs 2016 has a chapter on finance for growth. I hope improvements in our economic performance are mirrored in the switch in emphasis on the survival of our SMEs to their potential for significant growth in the period ahead. In this context, this reformed and expanded legislation will pay a major role in SMEs as time goes on and help to deliver on our Action Plan for Jobs 2016 target for 200,000 net additional sustainable jobs by 2020 for the benefit of everyone. I thank Senators for their support for this important legislation.
Fianna Fáil welcomes the Credit Guarantee (Amendment) Bill 2015, which vindicates its criticism that the credit guarantee scheme was not providing for sufficient lending to viable small and medium enterprises, SMEs, which under normal lending criteria are unable to obtain new or additional facilities from their banks. The scheme was supposed to facilitate this by providing banks with a Government-backed guarantee. The measures outlined in this Bill must result in improved lending under the scheme to SMEs. While I am confident that will happen, we will keep the pressure on to ensure it does.
I thank the Minister of State and his officials for bringing this important legislation before the Seanad. I welcome that it has been supported by all sides of the House, which is indicative of the importance of SMEs and SME financing in this country. As stated by many speakers from all sides of the House, the SME sector in Ireland is critical to the economic recovery of this country, including in terms of employment.
Senator White raised a number of important points in her amendments. There has been acknowledged disappointment that the scheme as introduced did not bring about the level of engagement expected. I am confident, as, I think, the Minister of State is, that the revisions being made to the scheme will improve the situation for SMEs in this country. Senator White also raised the issue of the importance of access to finance by SMEs, particularly those SMEs that owing to the recession are now heavily indebted and are finding it difficult to get finance from our banking sector, which sector, I might add, we ploughed €62 billion into in order to rescue it.
I welcome the announcement in December 2015 by the Central Bank of the introduction of new regulations that will make the system in relation to access to credit more transparent. The Governor has expressed confidence that following the introduction of the new regulations, where a business that, with its lender, has been restructured and is still having difficulty obtaining finance, that situation will be open to review. I do not believe any of us can stand over a scenario whereby viable SMEs are now being unduly prejudiced by the hard times they faced owing to the collapse of our economy.
This is important legislation. We are happy in this House to have seen it concluded in the lifetime of this Government.