Nicky McFadden (Longford-Westmeath, Fine Gael)
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484. To ask the Minister for Jobs, Enterprise and Innovation if targeted measures will be introduced to increase working capital in small and medium enterprises; and if he will make a statement on the matter. [36854/13]

Richard Bruton (Dublin North Central, Fine Gael)
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The Government is focused on delivering on a practical programme of actions that can achieve positive improvements in the overall operating environment for small businesses. Improving working capital is of course a priority for the Government.

I introduced two targeted schemes to support an additional flow of credit into the economy, namely the Microenterprise Loan Fund and the Credit Guarantee Scheme.

The Microenterprise Loan Fund improves access to credit for microenterprises and facilitate the growth and expansion of viable businesses with less than 10 employees from all industry sectors across the country, which have been refused access to credit from the banks. Support is in the form of loans for up to €25,000, available to start-up, newly established, or growing microenterprises, with viable business propositions, that do not meet the conventional risk criteria applied by banks. Microfinance Ireland is delivering the Microfinance Loan Fund, and will generate €40m in additional lending for microenterprises and create over 3,800 jobs over a 5 year horizon.

The SME Credit Guarantee Scheme (CGS) supports SMEs who, because of lack of collateral or because of the sector they operate in, face difficulties in accessing traditional bank credit. Commercially viable, well performing micro, small and medium enterprises that have a solid business plan and a defined market for their products or services, and can demonstrate their ability to repay the loan are the target of this scheme. The CGS will facilitate up to €150 million of additional lending per annum for SMEs with potential to create over 1,000 jobs each year. I am in the process of having the CGS independently reviewed to help improve the Scheme for all businesses, and I intend taking appropriate action as a result of the review to ensure use of the Scheme is maximised.

As part of the Action Plan for Jobs 2013, my Department is improving access to working capital so companies can avail of increased export opportunities through a range of products as this is a key issue for growing Irish enterprises. State supported variants of this form of finance are available in a number of countries and the SME State Bodies Group will examine if such a scheme has merit for Irish export orientated SMEs.

While also recognising that non-bank financing instruments can also be quite effective in complementing traditional financing channels in supplying growth capital to SMEs and entrepreneurs, the SME State Bodies Group will actively explore the potential of new and/or alternative approaches to financing SMEs for example peer to peer lending, supply chain finance and crowdfunding and will endeavour to ensure that any new initiatives within the financial system receive an appropriate response from the policy system.

The issue of working capital for SMEs will be a key consideration during the formation of the 2014 Action Plan for Jobs.