Joan Burton (Dublin West, Labour)
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Question 239: To ask the Minister for Finance further to Parliamentary Question No. 115 of 23 May 2006 and recent reports in the media, if he is disappointed that the banks are investing only €25 million in the Government social finance fund in view of the fact that the removal of the bank levy in budget 2006 saved the banks over €100 million in levies; and if he will make a statement on the matter. [22644/06]

Joan Burton (Dublin West, Labour)
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Question 240: To ask the Minister for Finance the way in which applicants will be assessed when applying for a loan in relation to the Government's social finance fund; if community projects with limited or no direct income from clients will be eligible for loans from this fund; what will happen to community projects that are unable to generate the necessary income to make repayments on the loan; if the banks have agreed to an acceptable level of non-repayment to reflect the higher risk category of the community projects in view of the fact that they are unable to access loans in the normal way; and if he will make a statement on the matter. [22645/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 239 and 240 together.

The Government's intention to promote community development was originally set out in the Programme for Government. In 2003, Sustaining Progress highlighted the role of social finance in that context. The banks' indication of willingness to contribute seed funding to the social finance initiative was given in response to a specific invitation in that regard. The banks have been involved in the development of the concept over time. They participated in the Round Table following the publication of the Social Finance in Ireland report in September 2003. There was a bank representative on the Steering Group that oversaw the preparation of the In the Common Interest report, which was launched by the Minister for Finance in November 2004.

The bank levy was introduced in the 2003 Budget as a temporary measure for three years and is therefore no longer in effect. There is no link between the social finance initiative and the bank levy.

Relative to the current scale of social finance provision nationwide, €25m represents a very significant volume of resources. This level of funding is aligned to what is expected to be appropriate to the next phase of the evolution of social finance provision. My priority is to ensure that the available resources are applied carefully in a focused way with clear objectives, avoiding bureaucracy, and with a view to market testing options for the further development of social finance.

My Department is continuing to consult with the Office of the Attorney General in relation to the legal design of the proposed wholesale supplier of social finance.