Bernard Durkan (Kildare North, Fine Gael)
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52. To ask the Minister for Finance the extent to which he has become aware of the difficulties faced by small to medium sized enterprises that have been affected by the downturn in the economy and have a negative credit rating registered against them by the Irish Credit Bureau even where they have discharged their debts; that this negative rating affects them for a five year period thereby restricting their access to borrowing facilities which in turn makes it impossible for them to continue in business; the action he will take to address these issues; and if he will make a statement on the matter. [41332/13]

Michael Noonan (Limerick City, Fine Gael)
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The Government recognises that SMEs are the lifeblood of the economy and will play a vital role in the recovery of employment growth in our country. It also recognises that businesses with legacy debts may be viable. One of the key priorities of the Programme for Government is to ensure that an adequate pool of credit is available to fund SMEs in the real economy during the restructuring and downsizing programme. The Irish Credit Bureau is a private entity and I have no direct function in the day-to-day operational decisions. In relation to the credit ratings provided to SMEs my department recognised the need to reorganise the government reporting system and established an inter-agency working group at the end of 2010 to develop a strategy to put in place an effective credit reporting system in Ireland. The working group's report formed the basis of the Credit Reporting Bill 2012.

The Deputy will be aware that the Credit Reporting Bill, 2012 is currently passing through the Houses of the Oireachtas which provides for the creation of an effective statutory based credit reporting system. The Bill includes the following provisions:

- The database will be owned by the Central Bank and the Bank will be responsible for the operation of the Central Credit Register.

- There will be mandatory reporting of a comprehensive range of credit information by credit providers.

- The Bill provides for controls with regard to access to information on the Register. By including provisions relating to access to data and security measures as well as provisions to help to deal with identity theft, this legislation should inspire confidence in businesses and in the consumer.

- The legislation proposes to extend the role of the Data Protection Commissioner to deal with complaints from micro enterprises and SMEs (with a turnover of less than €3m) in respect of their data held on the Credit Register. This initiative may provide some comfort to enterprises where they have a concern in relation to the potential storing of inaccurate data and where they do not have the resources to take legal action through the Courts to seek to have the data corrected. Inaccurate data on the Central Credit Register could result in the refusal of credit to a small company.

- In line with International practice, it provides for a retention period of 5 years in relation to credit information with respect to debts from the day on which it is entered on the Register. The Bill provides for the retention of information for a period of 6 months in relation to credit applications from the day it is entered on the Register. Anonymised information may be retained indefinitely.

In addition, the Government is fully engaged in supporting the SME sector and has imposed SME lending targets on AIB and Bank of Ireland for the three calendar years, 2011 to 2013. Each bank was required to sanction lending of at least €3 billion in 2011, €3.5 billion in 2012 and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks achieved the targets for 2011 and 2012. I have met the Boards of each of the banks in which the State has a shareholding three times since the start of this year. At these meetings, I have emphasised the importance of access to credit for SMEs and the need for an adequate flow of finance to be available to viable small businesses in Ireland.

In June 2013 the Central Bank set quarterly institution-specific performance targets for covered banks to move distressed SME borrowers onto longer-term solutions. The targets set reflect the banks' capacity, processes and systems. I should stress that the Credit Review process remains available to any SMEs whose credit has been reduced or withdrawn by AIB or Bank of Ireland as well as when credit is refused by them. I would strongly advise any SME whose credit is reduced or withdrawn to avail of the services of the Credit Review Office.