Fiona O'Loughlin (Kildare South, Fianna Fail)
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109. To ask the Minister for Finance his views on whether financial institutions are providing sufficient support and guidance to those SMEs that have found themselves in financial difficulty; and if he will make a statement on the matter. [30759/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy may be aware that the Central Bank is proactively regulating the financial system and has issued regulations aimed at protecting SMEs.  Following a review in 2015 of the Central Bank Code of Conduct for Business Lending to Small and Medium Sized Enterprises, the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 were made. They came into operation for regulated lenders (other than credit unions) on 1 July 2016 and, in the case of credit unions, on 1 January 2017.

The aim of the Code and these Regulations is to facilitate access to credit, promote fairness and transparency, and provide a framework for dealing with financially difficult cases. These revised SME Regulations introduce specific requirements for regulated lenders, including:

- greater transparency for borrowers around the application process;

- contacting SME borrowers who have been in arrears for 15 working days;

- reasons for decline that are specific to an SME borrower’s application;

- greater protections for guarantors;

- a warning for SME borrowers who are in danger of being classified as not co-operating;

- expanded grounds for appeal.

Under these SME Regulations, regulated financial services firms must also have a complaints handling procedure in place. 

The Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 addresses the procedures for dealing with arrears, sets out policy for financial difficulties, provision of standard information for borrowers in financial difficulties and how to communicate with borrowers in financial difficulties for micro and small enterprises in Part 2 and for Medium enterprises in Part 3 of the SME Regulations. The full SME Regulations can be found on the Central Bank website.

The Government also remains committed to the SME sector, as reflected in the Programme for a Partnership Government, and sees it as a key engine of ongoing economic growth.  Consequently, my Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit on both a macro and sectoral basis in order to ensure that sufficient access to finance is available to facilitate participants in the SME sector to reach their full potential in terms of growth and employment generation.  In this context, the Action Plan for Jobs 2017 includes a dedicated chapter and associated integrated set of actions to support the financing for growth in the SME sector.