John McGuinness (Carlow-Kilkenny, Fianna Fail)
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169. To ask the Minister for Jobs, Enterprise and Innovation as the lead Minister for the Action Plan for Jobs, with regard to improving credit to small and medium enterprises, if he has examined the crowd-funding model; and if he will make a statement on the matter. [19257/15]

Richard Bruton (Dublin North Central, Fine Gael)
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Action Plan for Jobs 2015 recognises that alternative financing activities such as peer to peer business lending, invoice finance, and crowdfunding can be a valuable source of funding to micro, small and medium businesses (SMEs) either as a complement to traditional bank funding or as an alternative to traditional bank intermediation in instances where bank credit has either been refused or not sought in the first place. The Government through the SME State Bodies Group, chaired by the Department of Finance are keeping the issue of alternative sources of finance under review as to how to best utilise their benefits to promote business development.

Recognising its potential importance my Department has been examining the crowdfunding model and has engaged with discussions on it at national and EU level.

Crowdfunding for business is in 2 forms: equity and lending. There are a range of possible issues associated with both forms. In broad terms the issues of consumer protection and regulation are relevant, as are the tax treatment of money lent or invested by the crowd. These issues are a matter for my Government colleague the Minister for Finance.

Another issue for Government is whether it should co-invest or co-lend with the crowd. In this regard the National Treasury Management Agency (NTMA), as controller and manager of the Ireland Strategic Investment Fund (ISIF), is currently working on commercial investment opportunities in the SME sector that will meet the strategic objectives and investment strategy of the ISIF. The NTMA has identified that there is a potential opportunity for the ISIF to provide lending support to SMEs through alternative finance lending providers that use a peer to peer model.

The NTMA sought proposals on behalf of a fund or funds that could be established to support lending via alternative finance lending providers with a view to assessing the level of interest from parties who might manage such a fund. The NTMA is now working through a process to see if a dedicated fund or funds can be established which would use ISIF and co-investor capital to support loans to Irish SMEs originated on alternative finance lending platforms.