Michael McGrath (Cork South Central, Fianna Fail)
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Question 126: To ask the Minister for Jobs, Enterprise and Innovation the position regarding the introduction of a partial loan guarantee scheme; if he will provide details of the work he has done on the introduction of such a scheme since he was appointed; and if he will make a statement on the matter. [35319/11]

Richard Bruton (Dublin North Central, Fine Gael)
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The design phase of a Temporary Partial Credit Guarantee Scheme is nearing completion and I will be bringing formal proposals to Cabinet shortly. Once a suitable scheme design has been finalised and approved by the Government, there will then be a further Request for Tender published at the end of November to select an operator to allow for the roll out of the scheme over the coming months.

In parallel with the work taking place on the design of the Scheme, the Department is preparing primary legislation to make the necessary statutory provision for such a scheme.

The Scheme will provide a level of guarantee to banks against losses on qualifying loans to job-creating firms to get banks lending again to industry and entrepreneurs.

This Scheme will be closely targeted at commercially viable, well performing companies that have a solid business plan and a defined market for their products or services which can demonstrate repayment capacity for the additional credit facilities but which cannot secure credit facilities due to the following two market failures:

· Insufficient collateral for the additional facilities or,

· Growth / expansionary SMEs which due to their sectors, markets or business model are perceived higher risk under current credit risk evaluation practices.

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 any commitment to a roll-over of the scheme for subsequent years. The temporary partial credit guarantee scheme will complement the Government plans on the restructuring and recapitalisation of the banking system which seek to secure an adequate flow of credit into the economy to support economic recovery.