Michael McGrath (Cork South Central, Fianna Fail)
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191. To ask the Minister for Finance the policy initiative the Government plans to put forward to counter the volatility caused by Brexit and the subsequent exchange rate volatility; and if he will make a statement on the matter. [34260/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Irish SMEs will require Government support to diversify and restructure their businesses in light of challenges posed by Brexit. It is a key Government strategy to support the growth of and investment in this important sector of the economy. As the Deputy will be aware, there are already significant Government measures to support the financing needs of SMEs; these will be available to assist SMEs deal with the short–medium term effects of Brexit. These supports include the SBCI, the Supporting SMEs Online Tool, the Credit Guarantee Scheme, the Microenterprise Loan Fund, Local Enterprise Offices and the Credit Review Office. 

Advisory supports in relation to business planning, such as those provided by the Local Enterprise Offices and Enterprise Ireland, will be particularly important in assisting viable but vulnerable SMEs that may be adversely affected because of Brexit. These supports will help raise awareness of both private market financial supports and existing State supports.

The provision of State supported hedging products, or similar products aimed at subsidising an exchange rate, is prohibited under EU State Aid rules. However, there are multiple financial providers active in the Irish market that can provide a comprehensive and competitive range of hedging and foreign exchange products to SMEs who require them.

Viable Irish SMEs can access sustainable, flexible and appropriately priced finance through the Strategic Banking Corporation of Ireland (SBCI). The SBCI uses an on-lending model; this means it does not lend directly to SMEs, rather it rather it channels its funds though partner financial institutions, known as on-lenders. The SBCI currently has eight on-lending partners, three bank and five non-bank. To the end March 2017, the SBCI has lent €657 million to over 15,000 SMEs supporting in excess of 67,000 jobs. The majority of SBCI loans are used for investment purposes. The SMEs who received SBCI finance are from a variety of business and economic sectors and are spread across every region of the country. The SBCI is currently seeking to broaden its distribution capability and market coverage by adding new on-lenders and working to develop innovative products, thereby serving to meet the needs of Irish SMEs and drive competition in the SME finance market.

Officials from my Department are working closely with the Strategic Banking Corporation of Ireland, the Department of Jobs, Enterprise and Innovation, the Department of Agriculture, Food and the Marine and Enterprise Ireland to examine Brexit mitigation policy measures to assist SMEs to deal with the effects of Brexit. Given the uncertainty concerning the post-Brexit relationship between the UK and the EU, the Deputy can rest assured that my Department will continue to monitor and address Brexit related issues facing Irish SMEs on an ongoing basis.