Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 533: To ask the Minister for Enterprise, Trade and Innovation if he is satisfied that sufficient finance is available for small and medium sized industry; if not the steps he intends to take to make sure that access will be made available so that jobs can be created and maintained; his views on the fact that there is a lot of financial pressure on many business structures because of delayed payments by Government groups; and if he will make a statement on the matter. [36157/10]

Batt O'Keeffe (Cork North West, Fianna Fail)
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Access to bank credit for businesses, particularly SMEs, has been central to Government Initiatives in addressing the crisis in the banking sector. Both the 2009 and 2010 Bank Recapitalisation arrangements provided specific commitments from the recapitalised banks to assist SMEs.

Under the 2010 Bank Recapitalisation arrangement, 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.

A recent ISME survey shows an improvement in access to bank credit for small businesses in the period from June to August. 58% of companies had accessed credit compared to 45% in the previous quarter.

The Credit Review Office is closely monitoring AIB's and Bank of Ireland's lending policies and their lending commitments in 2010 and 2011. The Credit Review Office is also available to pursue cases where SMEs are refused credit from the recapitalised banks.

I have ongoing contact with the main banks in relation to their lending to businesses and will, together with my colleague the Minister for Finance, and John Trethowan of the Credit Review Office, continue to ensure that they meet their lending commitments under the 2010 Recapitalisation package in terms of providing sufficient credit to the business sector.

Finance is also made available to businesses, including SMEs, through the various supports and grant Schemes provided through the Enterprise Development Agencies operating under the aegis of my Department. My officials are also working with their counterparts in the Department of Finance and the Credit Review Office on potential new credit initiatives for SMEs.

In relation to payments by Government groups, Government Departments and Public Sector bodies are subject to the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002). Under these Regulations, it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to interest ("late payment interest") on the amount outstanding. In the absence of any agreed payment date between the parties (i.e. specified in the contract), late payment interest falls due after 30 days has elapsed, provided the invoice is not subject to query. Interest applies until such time as payment is made by the purchaser. The current late payment interest rate from 1 July 2010 is 8% (that is based on the ECB rate of 1% plus the margin of 7%). The Regulations also provide for compensation for debt recovery costs.

In accordance with the Government's decision of 19 May 2009, all Government Departments are now required to pay their business suppliers within 15 days of receipt of a valid invoice. Departments are also required to report quarterly to the Department of Enterprise, Trade and Innovation on their performance in meeting the target. To date, four sets of composite returns from Government Departments have been published by my Department. This arrangement applies on an administrative basis.

The ongoing publication of composite details by my Department provides clarity on the performance of individual Departments in meeting the terms of the Government decision. While there is some variation between the performance of individual Departments and fluctuations across the different quarters, overall performance has been positive, with the value of payments made by central Government Departments within 15 days accountings for approximately 97% of the overall value of payments made. This initiative is helping to ease cash flow difficulties for SMEs. I believe there is scope to shorten public sector payment periods in areas beyond the central Government Departments.