Written answers

Tuesday, 16 June 2020

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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133. To ask the Minister for Finance the interaction his Department has had with the banks to determine the level of agreements being reached with small and medium-sized enterprises; and if he will make a statement on the matter. [11515/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As Minister for Finance, I have no statutory function in relation to the banking decisions made by individual lending institutions as these are taken by the board and management of the relevant institution. However, as the Deputy may be aware given the current COVID-19 crisis on 18 March I met with the Chief Executives of the five major retail banks and the Banking and Payments Federation of Ireland (BPFI). The banks have assured me that they are working to ensure a wide range of credit, cash flow and supply chain supports are offered to businesses who are trying to manage the pressures arising from COVID-19.

Further to this, An Taoiseach, Leo Varadkar T.D. and I, along with the Minister for Business, Enterprise & Innovation, Heather Humphreys T.D., met with the Chief Executives of the five Irish major retail banks on 11 May. The Taoiseach emphasised the important role of the banking sector in supporting the gradual re-opening of the Irish economy by ensuring a flow of credit to businesses as they begin to trade again, in line with the government’s Roadmap for Re-opening Society and Business.

We welcomed the ongoing work of the banks in helping business customers and mortgage customers impacted by COVID-19, which included the initial three month payment-breaks that allowed households and businesses to defer some of their most significant outgoings. On 30 April the members of the Banking and Payments Federation Ireland (BPFI) announced their intention to extend these payment breaks to six months for households and businesses which require it.

The Central Bank is focused on ensuring that extensions to COVID-19 related payment breaks operate in borrowers’ best interests and in line with regulatory requirements.  Payment breaks give customers the opportunity to postpone or reduce their repayments on their mortgage, personal or business loans, providing breathing space for borrowers from the severe income shock many households and businesses are experiencing.

The main concern of the Government currently is to ensure that SMEs have access to sufficient liquidity, and that access to credit for SMEs is maintained. The Government has announced a range of measures to assist companies deal with the consequences of the COVID-19 restrictions, and to ensure that they have access to sufficient liquidity, including loan schemes to assist SMEs.  On 2 May I announced a €2 billion Credit Guarantee Scheme to support COVID-19 affected business. This guarantee will give the participating lenders a high level of comfort and help them to continue to lend to SMEs that will be viable after this crisis passes but need access to credit during this difficult time.

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