Stephen Donnelly (Wicklow, Independent)
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215. To ask the Minister for Finance if the planned survey of demand for small and medium enterprise credit, as outlined in action 206 of the Action Plan for Jobs, will be brought forward as a result of the recent comments by Professor Morgan Kelly on the precarious situation facing these entities over the coming period; and if he will make a statement on the matter. [13173/14]

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. Government policy is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.

As the Deputy is aware, one of the commitments contained in the "Access to Finance" chapter of the Action Plan for Jobs 2014 is to undertake a survey of the demand for SME credit in Q2 and Q4 2014. My Department has commissioned biannual independent reports on the demand for credit by SMEs since 2011. These are the most comprehensive surveys of SME credit demand in Ireland and cover over 1,500 respondents. The next survey will cover the period October 2013 - March 2014 and is due for publication in May.  I will not be bringing forward the survey as it is important to ensure consistency in terms of the periods in which the surveys take place.

As regards the issue of SME debt it should be noted in the first instance that the Central Bank does not publish figures on arrears or non-performing loans specific to the SME Sector.  In June 2013 the Central Bank did set quarterly institution-specific performance targets for covered banks to move distressed SME borrowers onto longer-term forbearance solutions.  The targets set reflect the banks' capacity, processes and systems.  The Central Bank has informed the officials in my Department that the banks have reported that they have met their required targets to date.  This perspective has been reaffirmed by both the IMF and the European Commission who report that theworkout of SME arrears is progressing and that imposed targets are being met.  

Recently published results from the covered Irish banks indicate that both banks are well advanced in restructuring their SME loan books.  Bank of Ireland's most recent  published results indicate that they had reached resolution in 90% of distressed SME cases.  Similarly the AIB's results indicate a resolution level of approximately 65%.  It is also worth noting that defaulted loans for both banks have reduced year-on-year. 

The Central Bank's process of assessing financial institutions in their efforts to move distressed SME borrowers onto longer term sustainable solutions is an important element in assisting SMEs to potentially transition from a distressed to a more sustainable state and will continue in 2014. Additionally, the Government's decision to fast track legislation to allow small companies (as defined by the Companies Acts) to apply to the Circuit Court for examinership and the on going work of the Credit Review Office, which has been given an expanded remit, are all initiatives that will assist viable SMEs in adressing their debt situation. 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.

The remarks by the UCD academic Morgan Kelly relate to the forthcoming stress testing by the ECB and in this context the Governor of the Central Bank indicated recently that the purpose of the forthcoming ECB stress tests on 128 European banks, which includes Irish banks, was to remove market and government doubts about the ability of banks to absorb losses with their own shareholders funds.  I would again suggest that Professor Kelly would liaise with the Central Bank and share his analysis and findings in relation to his expectations on the potential impact that the forthcoming stress tests may have on the domestic SME sector.

Stephen Donnelly (Wicklow, Independent)
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216. To ask the Minister for Finance if the planned collaboration with KfW and the German Ministry of Finance to develop an initiative that will improve funding mechanisms for small and medium enterprises as per action 212 of the Action Plan for Jobs, will be brought forward as a result of the recent comments by Professor Morgan Kelly on the precarious situation facing these entities over the coming period; and if he will make a statement on the matter. [13174/14]

Michael Noonan (Limerick City, Fine Gael)
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The Government recognises that SMEs are the lifeblood of the economy and play a vital role in the continuing recovery of employment growth in our country.  Government policy since 2011 has focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.

While I note Professor Kelly's recent statements on SMEs, it does not change the Government's assessment that SME financing is a priority concern and one which is a clear focus of efforts to restore the economy to health.

Progress on the initiative with KfW is being made as quickly as possible with dedicated project teams in place on both sides in order to expedite the discussions. My officials have exchanged working papers with KfW and the German Ministry of Finance over recent weeks and  there have been meetings on this matter in Berlin, Frankfurt and Dublin as well as numerous teleconferences, most recently in the last week.

The aim of this project is to find ways to reinforce Ireland's economic recovery by improving funding mechanisms for the real economy. The intention is to ensure that the funding provided through this initiative will provide viable SMEs in Ireland with access to a long-term and appropriately-priced supply of finance in a manner that supports productive investment, encourages growth and increases employment in the SME sector, including where the market appetite remains constrained.  In this regard, the KfW project would have the dual and complementary roles of providing funding to SMEs in general and also targeting investment in a manner that supports key strategic sectors and alleviates financing constraints. 

Stephen Donnelly (Wicklow, Independent)
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217. To ask the Minister for Finance the position regarding the implementation of the cross-governmental small and medium enterprise access to finance online tool, as per action 221 of the Action Plan for Jobs; and if he will make a statement on the matter. [13175/14]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, I announced in Budget 2014 that the Government is developing a comprehensive communication strategy to increase awareness of the full suite of developmental business supports, totalling approximately €2bn, which is available from State bodies and agencies.

 To date, a number of initiatives have been undertaken to make information available to SMEs on the part of Government Departments and State agencies, including

- Engagement with industry and representative bodies through the SME Funding Consultation Committee;

- The Department of Finance's quarterly SME newsletter;

- Publication on my Department's website of a 'SME funding matrix';

- Targeted communication strategies by individual agencies directly to their clients;

- Various guidance documents and support material.

In spite of the work done by relevant Government Departments and agencies, all parties accept that a challenge remains around SMEs' awareness and understanding of Government supports. The most recent SME credit demand survey found that there was a low level of awareness of certain initiatives. It was against this background that the SME State Bodies Group was tasked with drafting a communication strategy.

As per Action 221 of the Action Plan for Jobs 2014, an online tool is currently being developed which will help small businesses to navigate through the range of Government supports available to them. Set to be launched in Q2 2014, upon answering a short number of questions an Irish business will be able to access a list of potential supports for their company and relevant contact information. The guide will be available on the new Local Enterprise Office website when that goes live.  Government officials are currently showcasing the online guide in test mode with small businesses at a series of "Taking Care of Business" roadshows in Limerick, Galway and Cork.