Written answers

Tuesday, 8 April 2014

Department of Jobs, Enterprise and Innovation

Small and Medium Enterprises Supports

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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257. To ask the Minister for Jobs, Enterprise and Innovation his plans to increase financial flexibility for business in Border areas. [15967/14]

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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My colleague the Minister for Finance has direct responsibility for banking issues. However, both the Minister for Small Business and I, have met with the banks on the issue of lending and supports available for SMEs in Ireland. In addition, officials from this Department are on the SME Funding Consultation Committee, with representatives of the banks and relevant government organisations. Through these engagements we continue to bring the needs of business to the attention of the banks and to press the importance of this sector to the economy.

In order to deal with specific market failures my Department introduced two targeted schemes in 2012 to support an additional flow of credit into the economy, namely the Microenterprise Loan Fund Scheme and the SME Credit Guarantee Scheme (CGS) to positively impact on job creation, retention and sustainability.

The Microenterprise Loan Fund Scheme improves access to credit for microenterprises and facilitates 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. I will commence a review of this Scheme in Q2 2014.

The CGS supports SMEs who, because of lack of collateral or because of an inadequacy of understanding of the novelty of a business model, market, sector or technology, 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.

I have undertaken a review of the CGS and will ensure that appropriate changes are made to it in 2014 under the Action Plan for Jobs, with a view to enhancing the up-take and impact of the Scheme as soon as possible.

The Action Plan for Jobs 2014 sets out a range of commitments with regard to access to finance, including a commitment to develop new sources of finance for SMEs. The Action Plan for Jobs commitments apply to the whole country and no special arrangements in this regard are being made for border areas.

These new sources include crowdfunding, peer to peer lending, supply chain finance, retail minibonds and working capital for exporters. Along with supporting the more traditional models of financing, this would support the need for a broad and diversified range of financing mechanisms. This is in recognition of the need for a mix of instruments to address the various types of business operating in Ireland and also the various growth phases of a business. The Action Plan for Jobs 2014 is building on the work undertaken in 2013 in this area.

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