Willie Penrose (Longford-Westmeath, Labour)
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Question 22: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the continuing problems facing small and medium sized enterprises as a result of difficulty in securing credit; the steps she is taking to deal with this situation in view of the implications for employment and job creation; and if she will make a statement on the matter. [41046/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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As previously outlined to the House, in supporting small and medium enterprises, Government focus has been on actions to sustain a positive business environment, including the proper functioning of the banking system, allied with specific targeted supports for SMEs through the enterprise development agencies.

Developments in the financial sector and wider economy during the last year have broadened the concerns for SMEs in relation to gaining access to finance and bank credit.

My Department and I have held regular meetings with the representative bodies of the SME sector and other stakeholders in relation to issues impacting on the sector and have established the Roundtable on Access to Bank Credit and subsequently the Credit Supply Clearing Group with a dedicated e-mail contact point to specifically deal with access to bank credit issues.

The Government has focused on creating a fit for purpose banking system and taken actions to sustain the banks and facilitate the flow of credit to the wider economy. The Bank Guarantee Scheme, the Banks' Recapitalisation Scheme, the nationalisation of Anglo Irish Bank and the NAMA Bill currently before the Oireachtas are all aimed at this. This has been further strengthened by the Government amendment to that Bill providing the Minister for Finance with a power to issue guidelines to the participating institutions in the NAMA process on lending practices and procedures to improve the flow of credit to small and medium-sized enterprises and, if necessary, to other sectors.

Under the Recapitalisation Scheme additional measures were introduced to support SMEs including a commitment to increase lending capacity to SMEs by 10%, the establishment of a €100m environmental and clean energy innovation fund by each bank, the contribution of a further €15m by each bank to new or existing seed capital funds, the introduction of the banks' Code of Conduct on Business Lending to SMEs, and the undertaking of an Independent Review of Bank Credit.

In the context of access to finance, Irish Banks have drawn down European Investment Bank (EIB) funding for loans for SMEs. In 2009, the EIB made €300m available to Bank of Ireland, Allied Irish Banks and Ulster Bank for onward lending to SMEs carrying out investment projects. This was additional to €50m previously made available to Bank of Scotland Ireland through its UK parent.

Within my own Department, the enterprise development agencies such as Enterprise Ireland, FÁS and the County and City Enterprise Boards have continued to assist enterprises through their grant and advisory schemes. Significant allocations were made in my Department's Estimates for 2009 to sustain the work of the development agencies. The €100m Enterprise Stabilisation Fund and the €250m Employment Subsidy Scheme are additional measures to make funding available to assist SMEs through the current difficulties. I announced a broadening out of the Employment Subsidy Scheme earlier this week.

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 an effect on all valid invoices received on and from 15 June 2009 and is helping cash flow difficulties for enterprises.

I recently announced my intention to reconvene the Small Business Forum to gain its assessment and views on the impact of the current economic situation on the needs of the SME sector as it positions itself for recovery. The SBF will also consider the new arrangements now necessary for ongoing structured dialogue between policy makers and stakeholders in the sector to ensure a continued common understanding of all the issues and the potential means of address. This meeting of the Small Business Forum will take place in the coming weeks.

SMEs are central to our economic development and the range of measures and supports in place will continue to help the sector adapt to the current economic climate.