Tom Fleming (Kerry South, Independent)
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Question 62: To ask the Minister for Finance the immediate action he will take to assist small to medium enterprises and the farming community who are finding it increasingly difficult to secure loans to expand or start up their businesses; his views on the negative impact that this is having on maintaining and creating jobs; and if he will make a statement on the matter. [31089/12]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the banking system restructuring plan creates capacity for the two Pillar Banks, Bank of Ireland and AIB, to provide lending in excess of €30 billion in the period 2011-2014. SME and new mortgage lending for these banks is expected to be in the range of €16-20bn over this period. This lending capacity is incorporated into the banks' deleveraging plans which allow for repayment of Central Bank funding through asset run-off and disposals over the period to 2013. The Government has imposed SME lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks were required to sanction lending, including lending for working capital purposes, of at least €3 billion in 2011, €3.5 billion this year and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks achieved their 2011 targets.

The Credit Review Office (CRO) reviews decisions by the pillar banks to refuse, reduce or withdraw credit facilities (including applications for restructured credit facilities) from €1,000 up to €500,000. The Credit Review Office is overturning 60% of the decisions referred to them, supplying €6.9m of credit, supporting 683 jobs in the SME sector. I would appeal to SMEs who have been refused credit by banks to avail of the services of the CRO.

The Microenterprise Loan Fund Bill was published on 22 June and my colleague the Minister for Jobs, Enterprise and Innovation is scheduled to take the Second Stage of the Bill in the Dáil today. The scheme, which is expected to be operational from early Autumn, will facilitate up to €40million in additional lending to microenterprises over the next five years. Furthermore, the Government is in the process of facilitating up to €150m per annum of additional credit through the Temporary Partial Credit Guarantee Scheme, designed for SME's who, because of lack of collateral or because of the specialised sector they operate in, face difficulties in accessing bank credit.

It is also important to note that SMEs are paying down existing debts at a faster rate than they are demanding new lending. The November 2011 Mazars survey on credit demand published by my Department showed that only 36% of companies surveyed requested bank credit in the period April-September 2011. This reflects the level of finance required by the companies surveyed, for trading at current levels, together with a reluctance to borrow for investment in new capital projects until foreseeable returns are more positive. The report also points out that 70% of companies surveyed had their credit applications approved or partially approved, excluding pending applications.