Frank Feighan (Roscommon-South Leitrim, Fine Gael)
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Question 125: To ask the Minister for Finance the action taken by him towards making finances available for small businesses; the funding and policy initiatives for small business; and if his attention has been drawn to the fact that the banks are still refusing to give credit to small businesses to continue their important role in the local community. [33323/11]

Michael Noonan (Limerick City, Fine Gael)
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The restructuring of the domestic banking sector creates capacity for the pillar banks to lend in excess of €30 billion over the next three years in SME and other important sectors. This is in excess of Central Bank estimates of the likely demand for SME and mortgage credit over this period. Both pillar banks are concentrating on the Irish economy and need to issue credit to make profits and rebuild their balance sheets. As the Deputy may be aware, the Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks will be required to sanction lending of at least €3 billion this year, €3.5 billion next year and €4 billion in 2013 for new or increased credit facilities to SMEs.

Both pillar banks have provided me with their plans to ensure that the 2011 target is achieved. This is particularly relevant given the comments contained in the fifth quarterly report of the Credit Review Office, which stated that "it will be a challenge for each of the banks to reach their €3 billion sanction target for new and restructured facilities in the current year."

On the issue more generally of the demand for credit, my Department has commissioned an independent survey of the demand for credit within the SME sector, the results of which will be submitted to me shortly. The outcome will provide the necessary information to better inform Government policy in this important sector of the Irish economy.

It is vital that the banks continue to make credit available to support economic recovery. However, it is not in the interest of the banks, businesses or the economy for finance to be provided unless the business is viable and has the capacity to meet the interest payments and repay the sum borrowed.

The Deputy should also be aware of the plans of the Minister for Jobs, Enterprise and Innovation to introduce a temporary partial loan guarantee scheme, which is a commitment included in the Programme for Government, and work is advancing on the arrangements for the introduction of this scheme.