Brendan Smith (Cavan-Monaghan, Fianna Fail)
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106. To ask the Minister for Finance his plans to introduce an export guarantee scheme for small and medium businesses due to the particular difficulties that are arising for some sectors that have a heavy reliance on exports to the sterling area; and if he will make a statement on the matter. [12697/17]

Michael Noonan (Limerick City, Fine Gael)
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The UK referendum on EU membership has led to significant fluctuations in the value of Sterling against the euro and this presents challenges for exporting Irish SMEs, in particular, those that export primarily to the UK. As the Deputy will be aware, it is likely that the recent exchange rate movements may signal a longer term, rather than cyclical, change in the value of Sterling.

These challenges make the current range of Government supports for the provision of credit even more vital. State backed, low cost, flexible credit can assist SMEs to restructure their cost bases and re-price their products and services so that they can continue trading with the UK in the weaker Sterling environment. Loans made to SMEs, on the basis of viable business plans, can also give them the opportunity to diversify into other markets and reduce their exposure to the UK. 

In this context, it is encouraging to note that SMEs can access lower cost, flexible finance from the Strategic Banking Corporation of Ireland (SBCI). To the end of December 2016, the SBCI has lent €544 million to 12,593 SMEs supporting an estimated 67,150 jobs. The SBCI's goal is to increase the availability of funding to SMEs at a lower cost and on more flexible terms than has been available in recent times on the Irish market. The SMEs who received SBCI finance are from a variety of business and economic sectors. More than 80% of loans are for investment purposes and the average loan size is €43,200. There is a broad regional spread of the SMEs supported, with 84.8% of them based outside Dublin.

The Action Plan for Jobs 2017 has committed the Government to roll out an Export Finance Initiative to support Irish exporting SMEs this year. Officials from my Department are working with the Department of Jobs, Enterprise and Innovation, the SBCI, Enterprise Ireland and the Ireland Strategic Investment Fund to develop a product that will support the working capital needs of exporting Irish SMEs. It is intended to launch this Initiative on a pilot basis initially, for a period of one year. As part of this process, my Department and the SBCI are engaging with DG Comp to address any potential State Aid issues.

The Deputy may also wish to note that, aside from the SBCI, there are significant Government measures to support the financing needs of SMEs that are facing challenges. These measures include the Supporting SMEs Online Tool, the Credit Guarantee Scheme, the Microenterprise Loan Fund, Local Enterprise Offices and the Credit Review Office. 

The Supporting SMEs Online Tool is a cross-government initiative. By answering eight simple questions, SMEs will receive a tailored list of available Government supports to suit their needs. The Supporting SMEs Online Tool is available at . 

The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs. Further information is available on the Department of Jobs, Enterprise and Innovation website.

The Microenterprise Loan Fund, administered by Microfinance Ireland, is an additional source of credit that provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing less than 10 people. Microfinance Ireland works in partnership with the Local Enterprise Offices nationally to administer this fund ().

The Credit Review Office(CRO) is another government initiative that helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review Office and the bank. The CRO overturns more than 50% of appeals it receives. Further details are available at 

Another recent initiative is the €150 million Agri Cashflow Support Loan Fund announced in Budget 2017 and developed by the Department of Agriculture, Food and the Marine in conjunction with the SBCI. This fund will provide highly flexible, low interest loans to farming SMEs to assist them in addressing the current difficult market conditions and commodity price volatility.

Government has and continues to work to ensure that the wide range of State supports currently available are tailored so that they provide effective support to SMEs affected by emerging challenges.