Michael McGrath (Cork South Central, Fianna Fail)
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54. To ask the Minister for Finance his plans to introduce for SMEs generally a loan scheme similar to the €150 million loan fund for the agri-sector announced as part of budget 2017; and if he will make a statement on the matter. [33881/16]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the Department of Agriculture, Food and the Marine (DAFM) recently announced a €150 million Cash Flow Support Fund for Farmers that will support highly flexible loans for up to six years, for amounts up to €150,000, at an interest rate of 2.95%; and will be available to livestock, tillage and horticulture farmers.

The Fund is supported by €11 million of EU Exceptional Adjustment Aid and further funding from the Department of Agriculture, Food and the Marine, under a derogation from state aid regulations that ordinarily apply to the agriculture sector. This measure will enable farmers to improve the management of their cash flow and reduce the cost of their short-term borrowings so they can continue to trade during the current period of commodity price volatility.

The government is committed to supporting the wider financing needs of SMEs, in all sectors of the economy, and ensuring that there is an adequate supply of affordable and appropriate credit to meet their needs. The Strategic Banking Corporation of Ireland (SBCI) was established to increase and facilitate the availability of low cost, flexible credit to SMEs. In this regard, it is encouraging to note that to the end of June 2016, the SBCI has lent €347 million to 8,619 SMEs. On average, the SBCI provides a discount of circa 1.5% on the market interest rate to SMEs.

The SBCI continues to have significant lending capacity; it has funding agreements in place with the European Investment Bank, KfW and the NTMA and has a current funding capacity of over €1 billion to enable it to make low cost loans available to SMEs across all qualifying sectors.

The most recent Department of Finance SME Credit Demand Survey sought the reasons why businesses did not seek credit and the results showed that 84% of respondents who had not applied for credit stated that they did not seek credit because they did not need it.

The deputy should note that this particular agriculture measure is only possible due to exceptional EU aid for the sector and it relates to issues that are specific to the agri-sector at present and consequently, it is a specific and time bound initiative. The SBCI will continue to be the central mechanism for providing SMEs with access to low cost financing products from a range of bank and non-bank lenders.