Brian Lenihan Jnr (Dublin West, Fianna Fail)
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This is an issue for the Board of NAMA, which advises me that NAMA is in advanced discussions with a number of interested parties who have indicated an interest in becoming shareholders in the NAMA Master SPV.

Brian O'Shea (Waterford, Labour)
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Question 85: To ask the Minister for Finance his views on whether the completion of the National Asset Management Agency will not see a significant increase in lending here; his further views on whether private sector credit will continue to contract over the remainder of 2010 and during 2011; and if he will make a statement on the matter. [11640/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The second Mazars report on credit availability, published in December, confirmed that while some businesses are facing significant challenges accessing credit, and the SME sector in general is more conservative in its borrowing, nevertheless businesses surveyed confirmed that new lending is still taking place. However, the proportion of refused credit, especially in certain sectors, remains a concern for Government. It should be noted that Central Bank figures for lending are net of provisions against possible loan losses. The most recent monthly statistics, which cover January 2010, note that just over half of the annual decline in headline private sector credit is as a result of valuation effects, such as write-downs of loans and increased bad debt provisions.

I have said before that the banks should be in a better position to lend once the riskiest loans have been removed from their balance sheets and that viable businesses should expect a fair hearing when seeking funding. The banks' balance sheets will be stronger once NAMA has taken over these loans and replaced them with Government guaranteed bonds; this will give the banks greater access to liquidity and make long-term funding cheaper.

To help address concerns over credit availability, under the NAMA Act I will shortly be issuing guidelines to ensure that SMEs, sole traders and farm enterprises will have recourse to an independent, external review of decisions of credit refusal by the NAMA participating banks. I hope that banks not participating in NAMA or covered by the Government guarantee will also decide to join the system. My aim is to have a simple, effective review process, run by people with experience and credibility. The banks must comply with the recommendations of the review process, or explain why they will not do so.

In addition to dealing with individual cases, the credit review system will examine the credit policies and practices of the banks in respect of SMEs. This will help me to decide what further action might be necessary to secure the flow of credit. I intend to publish the analysis from the review process so that the performance of the banks participating in NAMA will be clear to all. Work has been ongoing since December on the logistical aspects of the review system and it is envisaged that reviews will commence shortly.