Áine Brady (Kildare North, Fianna Fail)
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Question 136: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the European funds available to businesses, in particular small businesses, from which they could get a source of finance in view of the current credit crunch; and if she will make a statement on the matter. [43016/08]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The European Union provides support to European small and medium-sized enterprises in different forms such as grants, loans and, in some cases, guarantees. Support is available either directly or through programmes managed at national or regional level, such as the European Union's Structural Funds. SMEs can also benefit from a series of non-financial assistance measures in the form of programmes and business support services.

The European Commission's European Portal for SME's http://ec.europa.eu/enterprise/ sme/funding_en.htm presents details of the main European programmes available to SMEs and contains brief information as well as the main web sites for each programme. However, the information included on the website, is not exhaustive. In addition, the Enterprise Europe Network provide information on both national and EU financial supports. The financial instruments mentioned on these sites are managed by the European Investment Fund and implemented via financial intermediaries or specialised funds, to which those interested should refer directly.

The main Programmes are referred to below. Under the Competitiveness and Innovation Framework Programme (CIP) 2007-2013, €1.13 billion has been allocated for financial instruments for the above period. These are organised under three schemes, which are managed on behalf of the European Commission by the European Investment Fund (EIF):

1. The High Growth and Innovative SME Facility (GIF) aims to increase the supply of equity for innovative SMEs both in their early stages (GIF1) and in the expansion phase (GIF2). GIF shares risk and reward with private equity investors, providing important leverage for the supply of equity to innovative companies.

2. The SME Guarantee Facility provides additional guarantees to guarantee schemes, in order to increase the supply of debt finance to SMEs. It concentrates on addressing market failures in four areas:

1. access to loans (or loan substitutes such as leasing) by SMEs with growth potential;

2. provision of microcredit;

3. access to equity or quasi-equity;

4. securitisation.

3. A Capacity Building Scheme supports the capacity of financial intermediaries in some Member States.

The EIF's own activities are based on two instruments:

EIF's Venture Capital Instruments consist of capital investments in venture capital funds and business incubators that support SMEs, particularly those that are newly created and technology-oriented.

EIF's guarantee instruments consist of providing guarantees to financial institutions that cover credits to SMEs.

This Programme is managed and the projects selected at national and/or regional level.

JEREMIE is a joint initiative of the European Commission and the European Investment Fund with the European Investment Bank. It aims to improve access to finance for micro to medium-sized enterprises and in particular the supply of micro-credit, venture capital finance or guarantees and other forms of innovative financing. JEREMIE is managed as an integral part of European Regional Development Fund programmes.

These schemes do not provide direct funding to SMEs, but are usually processed through financial intermediaries such as banks, credit institutions or investment funds. They are intended to increase the volume of credit available to SMEs and to encourage these intermediaries to develop their SME lending capacity.

In addition to the above Schemes, on 3 October 2008, the European Investment Bank (EIB) announced that it was increasing its support for Europe's small and medium-sized enterprises (SMEs) to help mitigate the effects of the current credit crisis. This is to take the form of a €30 billion facility to provide loans to SMEs through commercial banks. I understand that the EIB has had discussions with a number of Irish banks about participation in the facility. Participation in the facility is, in the first instance, a commercial decision for individual financial institutions, who will be responsible for evaluating loan applications submitted by individual SMEs.

This is a very welcome initiative by the EIB and I would strongly urge Irish financial institutions to utilise this facility, and any other EU facility, to the maximum extent possible with a view to making any additional funding involved available to SMEs as soon as possible.

The Irish Enterprise Europe Network services in Ireland are delivered by Enterprise Ireland, together with Chambers of Commerce from Cork, Dublin, Galway, Sligo and Waterford and can be contacted on the following website address: http://www.enterprise-ireland. com/enterpriseeuropenetworkireland. Any Irish SMEs or financial intermediaries wishing to obtain detailed information on accessing any of the European Funds outlined above or indeed, other European funding initiatives, should contact the Irish Enterprise Europe Network in the first instance.