Noel Ahern (Dublin North West, Fianna Fail)
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Question 101: To ask the Minister for Enterprise, Trade and Innovation the progress made to date with the introduction of loan schemes or loan guarantee schemes for the small medium enterprise sector; and if a statement will be made on the matter particularly in relation to action on credit availability, the recommendations in Mazars Report and so on. [19802/10]

Billy Kelleher (Cork North Central, Fianna Fail)
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The whole aim of Government policy on banking has been to return the banks to a position where they can access funds and lend these funds on to viable businesses and households to support enterprise growth and economic recovery.

The Government has taken decisive action in order to get credit flowing again. The Bank Guarantee Scheme, the 2009 Recapitalisation Scheme, the nationalisation of Anglo Irish Banks and the establishment of the National Assets Management Agency have all contributed to the stabilisation of the banking sector with a view to facilitating the flow of credit. The 2010 Recapitalisation package builds on the earlier initiatives and includes additional supports for enterprises, including SMEs. In particular, AIB and Bank of Ireland have both committed to making available not less than €3 billion each for new or increased credit facilities to SMEs in both 2010 and 2011. This must include funds for working capital for businesses. Both banks must each produce a plan that includes a sectoral and geographic breakdown of how they intend to divide up this new lending. This will be a significant increase on the figures reported by the banks for 2009 and will help to sustain the economy and foster growth. This figure can be reviewed as the needs of the economy change.

As previously advised to this House, work is also under way in my Department on the examination of a possible scheme of Loan Guarantees for the SME sector which could augment lending by banks by addressing particular market failures. This is in line with one of the recommendations contained in the Mazars Review on Bank Lending to SMEs.

Enterprise Ireland and Forfás carried out examinations of loan guarantee schemes in the UK and in some other countries. Following more detailed examination, Forfás has recently submitted a report to my Department which is being considered. 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, facilitates genuine additional lending in the market and, at the same time, safeguards the interests of the taxpayer.