Bernard Durkan (Kildare North, Fine Gael)
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156. To ask the Minister for Finance the extent to which working capital continues to be made available to the farming and business sectors with particular reference to smaller enterprises; and if he will make a statement on the matter. [31118/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Supporting the availability of finance for SMEs, including smaller enterprises, is a cornerstone element of Government policy in our efforts to strengthen the economy and create jobs. Government is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. To facilitate this the Government has developed a number of initiatives to ensure that the supply of credit in the market is sufficient to meet the existing and future funding needs of SMEs.

To continue to monitor levels of working capital available to SMEs, my Department conducts biannual surveys looking at demand for credit by SMEs. The most recent Department of Finance SME Credit Demand Survey, covering the period April to September 2017, shows that, when pending applications are excluded, 88% of credit applications to banks were approved or partially approved. 38% of responders cited working capital/cash flow requirements as the main reason they were applying for bank finance. When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 81% of working capital coming from this source (up 8%) since September 2016. The survey for the period to end-March 2018 is underway at the moment.

The Microenterprise Loan Fund, administered by Microfinance Ireland, is targeted specifically towards smaller enterprises, it provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing less than 10 people.

The Strategic Banking Corporation of Ireland (SBCI) also ensures that viable SMEs can access low cost flexible loans from a variety of sources. The SBCI channels its funds through lending partners known as on-lenders. The SBCI currently has three bank on-lending partners and four non-bank on-lending partners. The SBCI has a current funding capacity of over €1 billion which it makes available to its on-lending partners as demand from SMEs arises. To the end of December 2017, SBCI cumulative lending stood at €920 million supporting 22,962 SMEs. In 2017, €391 million of loans were drawn by Irish SMEs with an average loan size of €37,300.

In March 2018, the SBCI launched a €300 million Brexit Loan Scheme, the Scheme is open to all SMEs and Midcaps with less than 499 employees that are viable but vulnerable and exposed to the impact of Brexit. The Scheme will provide loans of €25,000 to €1.5 million at a maximum interest rate of 4% with a term of 1-3 years to eligible enterprises. The Scheme will be in operation from March 2018 until March 2020, or until the Scheme has been fully subscribed.

The Government remains committed to the SME sector which it sees as a key engine of ongoing economic growth. My Department, working with other relevant Departments, Bodies and Agencies, will continue to advance policies to ensure the availability of both bank and non-bank credit so as to ensure that viable Irish businesses have sufficient access to finance.