Joe Costello (Dublin Central, Labour)
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Question 144: To ask the Minister for Finance the funding that has been made available by the EU to provide a flow of credit through financial institutions to small and medium enterprises in the member states since the current economic crisis began; the amount of funding that has been drawn down; the principal institutions which have drawn down funding; and if he will make a statement on the matter. [7099/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am only aware of one EU programme which has been introduced post financial crisis to improve the flow of credit which Irish banks have accessed. The European Investment Bank announced on 3 October 2008 that it was increasing lending for European small and medium enterprises (SMEs) to help mitigate the effects of the credit crisis. This support was in the form of a €30 billion facility to provide loans to commercial banks for onlending to SMEs to fund medium to long-term investment projects. Four banks operating in Ireland have access to the EIB facility: Allied Irish Bank (AIB), Bank of Ireland (BoI) and Ulster Bank have access to €100 million each and Bank of Scotland Ireland has access to €50 million.

It is important to emphasise that the EIB makes funding available for onlending to SMEs as part of its mandate to assist the development of the SME sector. As a result, commercial banks that borrow from the facility are required to ensure that the money is onlent to SMEs for investment and expansion of their activities. It follows that there are significant constraints on lending from the EIB scheme. Borrowing for short-term working capital is generally not eligible, although a permanent increase in working capital required to develop an expanding SME would qualify. Loans for cash flow or the refinancing of other debt and generally for the takeover of other businesses would not qualify. The distribution of drawdowns across institutions is of commercial sensitivity but indications are that substantial amounts of lending under the facility have been approved across a wide range of sectors.

Additional to the EIB scheme, I am aware of funds being made available to Irish SMEs through the Competitiveness and Innovation Programme operated by the European Investment Fund. However, this scheme was established before the onset of the financial crisis.