David Stanton (Cork East, Fine Gael)
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Question 56: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the other options, in addition to a State supported credit insurance scheme, she is considering to support Irish exporters who are finding it difficult to acquire credit insurance for their products; and if she will make a statement on the matter. [27511/09]

Billy Kelleher (Cork North Central, Fianna Fail)
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My Department's continuous support for enterprises arises through maintaining a positive business environment and through particular interventions from the State development agencies such as Enterprise Ireland, FÁS and the County and City Enterprise Boards. The significant allocations in my Department's Estimates for 2009 for the development agencies ensures that we can continue to build on this strategy for the future. Irish exporters can avail of the support of these agencies.

In addition, the Enterprise Stabilisation Fund was established by Government to support viable but vulnerable exporting companies who are experiencing difficulties because of the current economic climate. €100m has been allocated to the fund to the end of 2010. Client companies of Enterprise Ireland, IDA, Údarás na Gaeltachta and Shannon Development across all sectors within manufacturing and internationally traded services are eligible to apply. The fund is administered by Enterprise Ireland. To date, approximately €26m of the 2009 allocation of €50m has been approved or is being processed. 16 projects have been approved support of approximately €6m and a further 30 projects are being processed. In addition there are over 100 further enquiries that are live.

A properly functioning banking sector is an essential element for the maintenance and development of enterprises, especially exporting enterprises.

Government focus has been on creating a fit for purpose banking system as is evidenced by the bank guarantee scheme, the recapitalisation scheme, the nationalisation of Anglo Irish and the establishment of the National Assets Management Agency. Substantial guarantees and funding have been committed to the banking sector in order to keep the banks functioning to support the broader economy.

A key principle of all these actions is the recognition of the importance of business lending. The Banks' Recapitalisation Package contains a range of initiatives to directly assist our enterprise sector, including the following:

· The recapitalised banks have committed to increasing their lending capacity to SMEs by 10% over 2008. This should ensure that sound businesses will receive support from their banks.

· 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 and medium enterprises.

· SMEs are also covered by the Code of Conduct on Business Lending to SMEs. This Code which was published by the Financial Regulator came into effect from 13 March 2009. The application of the Code will promote fairness and transparency in the treatment of SMEs by the banks and should facilitate access to credit for sustainable and productive business propositions.

· The recapitalised banks agreed to pay for and co-operate with the carrying out of an Independent Review of Bank Lending to SMEs. Additional banks have now participated in this Review with the result that the 5 major lending banks are now included. The purpose of the review is to ascertain the position on credit availability to SMEs here and to recommend appropriate action to improve credit availability. The Independent Review has now been submitted to my colleague, the Minister for Finance, and will be published immediately. This Review should allow all stakeholders have an objective view of the state of lending from the banks.

· Allied Irish Bank, Bank of Ireland and Ulster Bank will also provide funding for SMEs on foot of €300m facilities provided by the European Investment Bank to assist developing SMEs.

Arising from the Recapitalisation Package, the Tánaiste has, along with the Minister for Finance, also established a Credit Supply Clearing Group with bank, business (including ISME and SFA) and State representation. This Group is responsible for identifying patterns of events where the flow of credit to viable businesses appears to be blocked and for seeking to identify credit supply solutions relating to these patterns. The Group is however, not an appeals mechanism for cases where credit has been refused by the banks. Individual business decisions remain the responsibility of the banks. The Credit Supply Clearing Group is being chaired by my Department and will work to provide a clear picture of any emerging lending patterns while facilitating direct discussion by all the relevant interests in addressing problems.

To assist and complement the work of the Credit Supply Clearing Group, I personally have held seven regional meetings beginning in Cork on Monday 29 June to discuss with representatives of business, banks and the state sector, their experience of gaining access to bank credit at local and regional level. Meetings to date were held in Cork, Waterford, Dublin, Bundoran, Shannon, Galway and Athlone. The last meeting will be held in Dundalk on Monday next 13 July. The outcome of theses meetings should facilitate a greater understanding of the issue at both regional and national levels.

Government has also introduced formal arrangements to reduce the payment period by central Government Departments to their business suppliers from 30 to 15 calendar days. This commitment has effect on all valid invoices received on and from 15 June 2009 and should help ease cash flow difficulties for enterprises.