Peadar Tóibín (Meath West, Aontú)
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30. To ask the Minister for Enterprise, Trade and Employment the number of persons that have applied for a microfinance loan through Microfinance Ireland and the local enterprise offices, LEOs, in each of the past five years; the number of persons that have received a loan in each of the past five years; the average length of time for the processing of each loan from first engagement of the customer to the delivery of the loan; the number of steps necessary for businesses to take to achieve a loan; the rate of interest; and the reason he reduced the cap on loans from €50,000 to €25,000 in the middle of an economic crisis. [2695/21]

Leo Varadkar (Dublin West, Fine Gael)
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The Microenterprise Loan Fund administered by Microfinance Ireland provides loans to businesses that do not meet the conventional risk criteria applied by commercial lenders and have less than ten employees.

Data on the number of microenterprises that applied for a loan directly from Microfinance Ireland and through the LEO network in each of the past five years and the number of microenterprises that drew down a loan in each of the past five years is provided in the table below.

*The latest data available is up to 31 October

The steps required to obtain a loan are:

- The applicant must choose the loan package that suits the business and register their interest in that loan package. MFI will then send the applicant the relevant document package.

- The applicant must prepare and submit an application.

- MFI will assign a loan assessor who will contact the applicant directly to discuss the application and the business.

- MFI will make a credit decision

- MFI will contact the successful applicant to request documents to be submitted in order to draw down the loan

Further details are available on the MFI website

The average processing time of a loan application up to the credit decision is 2.33 days where a complete application is provided and this extends to 9 days in the case of incomplete applications. The applicant then has 21 days to provide documents to allow drawdown and has a further 60 days in which to draw down the loan.

Standard loans from Microfinance Ireland have interest rates of between 6.8% and 7.8% with reduced rates for the Covid-19 loan and Brexit Business Loan of 4.5% where the application is made through the Local Enterprise Network or other partners or 5.5% where the application is submitted directly to MFI.

The maximum loan level was reduced in August 2020 for two reasons. Firstly, my Department's COVID Credit Guarantee Scheme was launched in September with loans from €10,000 to €1 million. It was important not to have two state loan products competing with each other. Secondly, the EIB EASI counter guarantee, which MFI has access to, only covers individual loans to a maximum of €25,000. Following MFI rapid emergency response in March, it was prudent for the state to ensure as many MFI loans could avail of this cost reducing measure.

I wish to assure the Deputy that MFI are an important resource fully supported by myself and my Department and are ready to continue to provide loans to micro businesses through their Brexit, COVID and standard loans.