Joan Burton (Dublin West, Labour)
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Question 76: To ask the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 43 of 11 December 2008, the extent to which her Department is researching the possibility of the financial institutions accessing loan guarantees from the European Investment Fund that would enable them to expand their lending to small enterprises; and if she will make a statement on the matter. [47439/08]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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As the Deputy will be aware, the Competitiveness and Innovation Framework Programme (2007-2013) contains a financial instrument, the SME Loan Guarantee Facility, that aims to improve the financial environment for SMEs by facilitating their access to debt and equity finance. The total indicative budgetary appropriations for the financial instruments under Competitiveness and Innovation Framework Programme are €1.1 billion and about half of this, approximately €500 million, is foreseen for the SME Loan Guarantee Facility for the period 2007-2013.

The SME Loan Guarantee Facility is operated by the European Investment Fund (EIF) on behalf of the European Commission and was launched by the Commission and the EIF, in late September 2007. My Department informed the Irish Banking Federation of the proposal in December 2007, including, the operation and the scope of the arrangement.

Financial intermediaries are free to make contact directly with the EIF concerning participation in the facility and I am aware that some have done so in the past.

Proposals from financial intermediaries will be examined by the EIF on a continuous basis up to 2013, within the constraints of the available Community budget allocations. Irish financial intermediaries, therefore, continue to have an opportunity to participate in the Facility during this period.

My Department continues to make itself available to any bank interested in pursuing the possibility of securing funding under the SME Loan Guarantee, with a view to their being put in contact with relevant officials in the European Investment Fund (EIF) and/or the European Commission, for further advice and assistance.

Participation in the Facility is however, a commercial decision for any financial intermediary concerned, in the first instance.

The Deputy will also be aware that the above EIF Loan Guarantee Scheme is separate from the recently announced €30 billion EIB Fund to provide loans to SMEs through commercial banks, in the light of the current economic environment. The European Investment Bank (EIB) has in the last fortnight, indicated that it is in discussions with four Irish banks in relation to its new €30 billion Facility. I very much welcome this development.