Michael D Higgins (Galway West, Labour)
Link to this: Individually | In context

Question 62: To ask the Minister for Finance the extent to which Irish financial institutions have been able to access the €30 billion European Investment Bank small and medium enterprise lending programme; when he expects to see the impact of this scheme to filter through to businesses operating here and the extent to which it will impact; and if he will make a statement on the matter. [6365/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The European Investment Bank (EIB) announced on 3 October 2008 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, through the establishment of a €30 billion facility to provide loans to SMEs through commercial banks.

Participation in the facility is a commercial decision for individual financial institutions. I understand, however, that a number of Irish financial institutions have submitted applications to access the facility. In mid-January 2009, Bank of Scotland (Ireland) announced that it had concluded an agreement to access €50 million from this fund. It is my understanding that negotiations are ongoing between other Irish financial institutions and the EIB, which hopefully can be finalised shortly. This is an important initiative from the EIB and I would strongly urge the Irish financial institutions to utilise the facility to the maximum extent possible with a view to making the additional funding involved available to SMEs as soon as possible.

Jim O'Keeffe (Cork South West, Fine Gael)
Link to this: Individually | In context

Question 63: To ask the Minister for Finance if he is satisfied that businesses are getting satisfactory lines of credit; and if he will make a statement on the matter. [6278/09]

Pat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context

Question 101: To ask the Minister for Finance his views on the establishment of a working capital guarantee scheme to ensure that viable businesses can access the credit they need to survive over the short-term; and if he will make a statement on the matter. [6364/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 63 and 101 together.

As part of the banks recapitalisation scheme Allied Irish Bank and Bank of Ireland have committed to a range of measures to maintain a flow of credit to small businesses. They have committed to increase lending capacity to small to medium enterprises by 10% and to providing an additional 30% capacity for lending to first time buyers in 2009. If the mortgage lending is not taken up, then the extra capacity will be available to SMEs.

A €100m environmental and clean energy innovation fund is also being established by each bank as well as a further €15m each to new or existing seed capital funds. Much of this funding will flow to small businesses.

In addition, the banks have agreed to engage in a 'clearing group' chaired by a Government representative and including representation from business interests and State agencies. The purpose of this group will be to identify specific patterns of events or cases where the flow of credit to viable projects appears to be blocked and to seek to identify credit supply solutions.

The recapitalised banks have also agreed to fund and co-operate with an independent review of credit availability which will be managed jointly by the banks, Government and business representatives and will report within five weeks.

A Code of Conduct for Business Lending to Small and Medium Enterprises was published by the Financial Regulator on 13 February. This code applies to all regulated banks and building societies and will ensure that they assist borrowers in meeting their obligations, or otherwise deal with an arrears situation in an orderly and appropriate manner. The Code also requires banks to offer annual review meetings, to inform customers of the basis for decisions made and to have written procedures for the proper handling of complaints.

As part of the recapitalisation banks have promised to actively promote new lending. This has been evidenced by recent press and TV advertisements.