John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context

Question 237: To ask the Minister for Jobs, Enterprise and Innovation the reason he has not accessed the European microfinance programme which makes available €25,000 for small enterprises of fewer than ten employees; and if he will make a statement on the matter. [15791/12]

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

The European Progress Microfinance Facility is a European Investment Fund (EIF) initiative to support entrepreneurship and employment through microfinance activities. It was established by the EU Commission in 2010.

It does not directly provide microfinance to either Member States' Governments or small businesses. Instead, following a rigorous due diligence process, selected microfinance providers across the EU who fulfil the requirements are accredited by the EIF and can avail of supports designed to increase lending into the Microenterprise sector.

Specifically, capped guarantees may be provided to eligible intermediaries partially covering their portfolios of micro-loans, or loan facilities may be availed of to increase lending to micro-enterprises. The guarantees provided are intended to mitigate bad debts incurred in the lending operations. Microfinance providers may apply for the guarantee, or for the loan facility, but may not avail of both. Eligible intermediaries are institutions that provide microfinance loans and/or guarantees to individuals or micro-enterprises established in the EU Member States. To apply to become an intermediary, interested institutions must submit a formal application for Progress Microfinance micro-credit guarantee directly to the EIF. Any EU microfinance institution may apply to the EIF under this Facility and State involvement is not a prerequisite.

I am currently finalising the delivery structures for a State-backed 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. Following establishment of the Microfinance Fund, application will be made for the EIF guarantee facility under the European Progress Microfinance Facility.