Willie O'Dea (Limerick City, Fianna Fail)
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Question 89: To ask the Minister for Jobs, Enterprise and Innovation his policy on improving access to credit for businesses; and if he will make a statement on the matter. [13158/12]

Richard Bruton (Dublin North Central, Fine Gael)
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A key priority of the Programme for Government is to ensure that an adequate supply of credit is available to fund small and medium sized businesses. The Government's restructuring of the main pillar banks last year was designed to ensure a better flow of credit to viable businesses. In addition the Government has four distinct measures it is delivering to supplement the more traditional sources of credit for business. These are: a Microfinance fund for business start-ups, a Partial Loan Guarantee for SMEs struggling to access credit, a Development Capital fund for businesses primed for rapid growth and the Innovation Fund for Ireland which provides investment funds for innovative, high tech start-ups.

Work is well advanced in my Department to realise our commitments in terms of the Temporary Partial Credit Guarantee Scheme and Microfinance Loan Scheme. An Operator for the Temporary Partial Credit Guarantee Scheme has been selected through a public tendering process and will be contracted by my Department to act as the agent for the practical oversight, management and operation of the Scheme. Primary legislation to underpin the Scheme is being urgently progressed with the Attorney General's Office, and a Credit Guarantee Bill will be published during this Spring session. The Guarantee Scheme will go live as soon as possible following enactment of the legislation in Quarter 2 2012.

I am currently finalising the delivery structures for the Microfinance Loan Fund to provide loans to the microenterprise sector. This Fund is designed to stimulate lending to sustainable microenterprises and is targeted at start-up, newly established, or growing micro enterprises across all industry sectors, employing not more than 10 people. It will provide loans of up to €25,000 for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks. The Government recently approved the allocation of €10 million as seed capital for the Fund. It is anticipated that the Fund will supplement this seed capital by leveraging further funding from private sources, including the banks.

Following establishment of the Microfinance lending facility, application will be made for the EIF guarantee facility. A rigorous due diligence process is required to secure EIF accreditation. Following EIF approval of the guarantee facility, and subject to completion of all administrative and corporate governance requirements, it is anticipated that the Loan Fund will become operational in Quarter 3 2012.

The Development Capital Scheme as outlined in the Action Plan for Jobs has been developed to complement the existing range of financial supports offered by Enterprise Ireland (EI). It is proposed that the Scheme will be launched and marketed by end Q1 2012. The exchequer funding requirement for this scheme is €50m over 10 years. The scheme will be demand led and will target the cohort of companies that are growth focused. It will be open to all firms in that cohort regardless of their location in Ireland.

Innovation Fund Ireland is a key pillar of building our smart economy and investments through the Fund facilitate job creation in innovative export focused sectors as well as proving a return to the exchequer over time. The Fund has up to €250 million available to make commitments. Over the lifetime of the funds, it is envisaged that the State will make a return on its investment.

The first round of commitments out of the €125m of Enterprise Ireland managed funds are expected to be to be formalised in the near term with commitments of approximately €60m. I issued a statement on October 5th indicating my intention to issue a second call for expressions of interest for the balance of the fund of €65m, when the first of the new Irish offices associated with these new investments is established. The operation of the Innovation Fund will continue to be managed by EI in ongoing co-operation with the NPRF.

The Action Plan for Jobs 2012 includes a commitment for the Pillar banks to produce quarterly reports for the Department of Finance which incorporate figures for sanctions and drawdowns by SMEs. The data contained in these reports will be reviewed and analysed by the Department of Finance and the CRO, with a sharper focus on the"new money" element, to ensure that the pillar banks are compliant with the terms of the Government recapitalisation as it relates to the provision of credit for SMEs. These targeted measures supplement the initiatives already taken by the Minister for Finance to restructure, re-capitalise, reorganise and deleverage the banking system to ensure a properly functioning banking system and secure an adequate flow of credit into the economy to support economic recovery.