Lucinda Creighton (Dublin South East, Fine Gael)
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Question 100: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she has read the county and city enterprise boards' second half yearly survey; her views on its finding that credit availability has worsened in the past six months; and if she will make a statement on the matter. [29755/09]

Billy Kelleher (Cork North Central, Fianna Fail)
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I am aware of the survey carried out by the county and city enterprise boards (CEBs). The results of individual surveys, from State agencies, the enterprise sector and the banking sector can all be useful in highlighting the generality of the credit supply issue but they must all be examined in the context in which they are carried out and the methodologies applied.

The banks' recapitalisation package was about securing the long-term health of the economy and about enabling our banks to get back to the business of lending to viable projects and about saving jobs. The package includes many supports for SMEs.

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 €100 million 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.

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

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 five 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 shortly. I welcome the completion of this review as it should allow all stakeholders have an objective view of the state of lending from the banks to SMEs and provide some clarity on the level of credit being declined.

Arising from the Recapitalisation Package, the Minister for Finance, and the Tánaiste 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 the Department of Enterprise, Trade and Employment 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 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. To date, meetings have been held in Cork, Waterford, Dublin, Bundoran, Shannon, Galway and Athlone. The last meeting will be held in Dundalk on Monday next 13 July. In the course of these meetings, I met with local representatives of the major banks, business representatives from local Chambers of Commerce, ISME, SFA, IFA and the Irish Hotels Federation. Local representatives from the various State Agencies such as Enterprise Ireland, City and County Enterprise Boards and Fáilte Ireland, also attended. The outcome of theses meetings should facilitate a greater understanding of the issue at both regional and national levels.

Outside of the banking sphere, the 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 the Department's Estimates for 2009 for the development agencies ensures that we can continue to build on this strategy for the future.

The 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 SMEs.