Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Question 33: To ask the Minister for Jobs, Enterprise and Innovation his plans regarding the development of an enterprise loan guarantee scheme; the amount of additional credit it will deliver into the system; how the criteria for the granting of credit differ from the criteria currently used by banks; and the annual cost to the State of such a scheme. [14724/11]

Willie O'Dea (Limerick City, Fianna Fail)
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Question 43: To ask the Minister for Jobs, Enterprise and Innovation when he expects the partial guarantee scheme to come into effect; the period to which it will apply; if it will be applicable generally or for specific sectors; and the estimated annual cost to the taxpayer. [14624/11]

Richard Bruton (Dublin North Central, Fine Gael)
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I propose to take Questions Nos. 33 and 43 together.

As part of the Jobs Initiative announced in this House on, 10th May, both the Minister for Finance and I confirmed the Government commitment to initiating a tendering process for the development of a temporary partial credit guarantee scheme.

The design of the scheme will draw from international experience to support new lending that would not otherwise have been extended by the banks. In this way, the scheme will be targeted in its scope and will complement, rather than be a substitute for, existing lending activities by the main financial institutions. It will be designed to encourage banks to lend to these new or expanding commercially viable SMEs so that they can grow their company, develop new products or expand in to new markets.

The Government's commitment will be for an initial period of one year. Specific performance criteria will be set down that allow for review and revision of the scheme at the end of that initial period before committing to a roll-over of the scheme for subsequent years. There will be a modest level of exposure to the taxpayer when the scheme is launched but there will be a significant positive knock-on benefit to the economy in terms of job creation, welfare savings and returns to the Exchequer by way of tax revenue generated.

Any costs arising in 2011 will be minimal and associated with the design and set up of the scheme which is due to be in place by the autumn. The tendering process will be commenced shortly.