Joan Burton (Dublin West, Labour)
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Question 134: To ask the Minister for Finance the adequacy of access to finance and working capital for small and medium enterprises, particularly for micro-enterprises with fewer than ten staff; his views on the finding of the recent Mazars review of lending to SMEs; the actions he has taken on foot of this report; his plans to bring forward new proposals on foot of the recommendations contained in the report; and if he will make a statement on the matter. [32400/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Access to finance for small and medium enterprises (SMEs) is of major concern to the Government. Making additional funds available for SME lending was a condition of the recapitalisation agreements with AIB and Bank of Ireland. The banks report quarterly on their commitments under recapitalisation and the Supplementary Documentation (Green Book) issued by the Department of Finance last week contains details of SME lending by the two banks, based on those reports. The figures show a significant flow of SME lending. Bank of Ireland report drawdown of €1.5 billion, while AIB report €1.3 billion "additional credit sanctions" and €859 million drawdown in the first half of this year. It is clear that credit drawdown/approvals are down on the same period last year, but the amounts are still substantial and represent a significant level of activity.

The Mazars Review covered the supply and demand for credit by SMEs, using both bank data and a survey of SMEs. It is clear from the review that demand for credit is at a much reduced level. In addition, the survey shows that refusal rates also vary by sector from 6% to 48%. Average refusal rates for Micro SMEs were 30%. However, the consultants also examined a sample of files where credit was refused and found that, in general, refusal seemed reasonable in the context of normal commercial and business criteria.

To help tackle credit problems, the Government has established the Credit Supply Clearing Group with bank, business 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.

As part of the ongoing work of the Government's Credit Supply Clearing Group, the Department of Enterprise, Trade and Employment launched an email link on 28 August last calling for submissions from viable businesses that have been refused credit by banks. Such businesses, where the flow of credit appears to be blocked, can now send their details to a dedicated email contact point at the Department, creditsupplyclearinggroup@entemp.ie.

As part of its support for SMEs the Government has also provided €100 million for an Enterprise Stabilisation Fund. Under the scheme, Enterprise Ireland can give up to €500,000 to viable companies with robust business models that are facing difficulties as a result of the current economic environment. In addition the Temporary Employment Subsidy Scheme will provide a subsidy of €9,100 per employee over 15 months to qualifying exporting enterprises in the manufacturing and-or internationally traded services sectors.