Richard Bruton (Dublin North Central, Fine Gael)
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Question 212: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her views on the need for State sponsored initiatives to help small business access credit; the initiatives in other countries being monitored by her Department and their potential here; and if she will make a statement on the matter. [5304/10]

Richard Bruton (Dublin North Central, Fine Gael)
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Question 213: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she has examined an initiative (details supplied) and its relevance here. [5305/10]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 212 and 213 together as they both relate to State sponsored initiatives to help small business access credit.

In supporting small and medium enterprises, the Government's 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 my Department's enterprise development agencies. Access to finance and bank credit for SMEs have been a major concern.

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. I established the Roundtable on Access to Bank Credit and subsequently the Credit Supply Clearing Group with a dedicated e-mail contact point on my Department's website, 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 passing of the NAMA Act were all aimed at this. The NAMA Act has been further strengthened by the Government amendment 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. My colleague the Minister for Finance has already announced the establishment of the new Credit Review System which will examine the credit policies and practices of the banks, particularly for SMEs. This new system will inform Government as to what further action might be necessary to secure the flow of credit to Irish enterprise and, through publication of the analysis from the review process, help ensure that the performance of the banks participating in NAMA is obvious to all.

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 two Independent Reviews of Bank Lending by Mazars published last July and last December, respectively.

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. My colleague, Billy Kelleher, Minister for Trade And Commerce, met with representatives of these four banks to discuss progress on the take up of these funds. The banks have confirmed that significant approvals have already been made to clients in respect of these funds and the funds should be substantially committed by the first quarter of 2010. The banks are actively promoting their availability through their business managers and other contacts.

Within my own Department, the enterprise development agencies such as Enterprise Ireland, FÁS and the County and City Enterprise Boards continue to assist enterprises through their grant and advisory schemes. Significant allocations were made in my Department's Estimates for 2009 and 2010 to sustain the work of the development agencies. The Enterprise Stablisation Fund and the Employment Subsidy Scheme were specifically introduced in 2009 to assist enterprises.

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 is helping cash flow difficulties for enterprises.

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. The services provided by the enterprise development agencies are kept under review and will be adjusted to respond to the current economic situation. Agencies would review their activities in light of international developments and best practice and I am prepared to consider any proposals for further supports for the SME sector.

In relation to the initiative referred to by the Deputy, many of the supports outlined are already being addressed or provided through our various enterprise support agencies in Ireland.

Last week, I confirmed that work is underway within my Department on the examination of a possible scheme of loan guarantees for the SME sector. This is in line with one of the recommendations contained in the Mazars report on credit availability. Enterprise Ireland and Forfas have carried out examinations of loan guarantee schemes in the UK and in some other countries. Forfas, together with the Department, is carrying out a further examination and on completion of this work, I will bring the results before the Government. As with any initiative, we will need to ensure that any scheme developed directly assists businesses while at the same time safeguards the taxpayer.

Question No. 214 answered with Question No. 173.