Damien English (Meath West, Fine Gael)
Link to this: Individually | In context

Question 60: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the action she has taken to address concerns of small and medium sized enterprises that they cannot access the necessary levels of credit to maintain business operations; and if she will make a statement on the matter. [41989/08]

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

I refer the Deputy to my answer to Priority Question Number 41986/08 earlier in this session as the issues raised in the current Question significantly overlap.

The proper functioning of the banking system is key to our ability to address the current economic crisis and to our capacity to respond to recovery in the future. The continuing availability of credit to enterprises, especially SMEs, is a central responsibility of the banking system. Ministerial responsibility for the banking system rests with my colleague, the Minister for Finance, Mr. Brian Lenihan, T.D.

The Government's bank guarantee provided the Irish banks with the support they required to maintain their normal liquidity position in interbank lending and debt markets. This move was essential to allow banks to continue their normal ordinary business of providing credit in this country and contributing to the normal functioning of the economy.

The availability of finance is of course a critical element of our overall competitiveness and a key part of our national economic and financial infrastructure. Because the Government has given the guarantee, covered institutions in Ireland have access to the liquidity and funding necessary for this purpose.

The Government want to see the banks meeting the legitimate financial needs of consumers and business. The onus is now on the boards and senior executives of the banks to ensure they are properly positioned to meet this expectation. The banks have confirmed that notwithstanding the challenging economic and financial environment, good projects will continue to be supported by the banks. The banks' principal area of focus is on their existing customers or new business customers with good commercially sound projects. They are very conscious of what is expected of them under the guarantee insofar as business lending is concerned.

I am obviously in regular contact with my colleague, the Minister for Finance, on the issue and officials of my Department are in ongoing discussions with their counter parts in the Department of Finance concerning the impact of the lending practices of the banking sector on small businesses.

Within the area of my own responsibility, my Department's continuous support for indigenous companies arises through maintaining a positive business environment and through particular interventions from the State development agencies such as Enterprise Ireland, the City and County Enterprise Boards and FÁS. I have ensured that these agencies continue to be sufficiently resourced through the Estimates process and that key areas such as the Science and Technology allocation and micro enterprise support, through the CEBs, actually received additional funding for 2009.

The agencies are focused on helping Irish businesses through the current economic difficulties to develop and grow their exports, by continuing to prioritise investment in Science, Technology and Innovation and by providing financial and non-financial supports to small businesses. The existing range of training supports will continue and appropriate re-training and support services will be available for those who have recently lost their jobs.

Access to capital is also available to firms through BES and Seed Capital schemes and through the Venture Capital initiatives promoted through Enterprise Ireland. Including the Government's investment of €175m through EI, 7 new venture funds have raised over €500m which is available to invest in the Irish SME sector. The importance of the small business sector is obvious as is the extent of the Government's and my own ongoing commitment to the sector.

The Minister for Finance has already acted positively to support the banking system through the introduction of the State's bank guarantee scheme. Deputies will be aware that the Taoiseach has in the last number of days signalled in this House that the Government is actively considering a range of proposals in this area and is ready to take appropriate action.