Written answers

Thursday, 4 March 2021

Department of Enterprise, Trade and Employment

Credit Guarantee Scheme

Photo of Pádraig O'SullivanPádraig O'Sullivan (Cork North Central, Fianna Fail)
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6. To ask the Minister for Enterprise, Trade and Employment the number of applications made to banks under the €2 billion Covid-19 credit guarantee scheme; the number refused; and if he will make a statement on the matter. [12277/21]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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The COVID-19 Credit Guarantee Scheme is the largest loan guarantee scheme in the history of the State. The Scheme provides €2 billion in lending, for terms up to five-and-a-half years and offers a range of lending products between €10,000 and €1 million. It is available to SMEs and small mid-caps (business with less than 500 employees), including primary producers (businesses engaged in the farming and seafood sectors).

The Scheme is currently available through commercial banks, a number of non-bank lenders and a number of credit unions. Since January, 19 Credit Unions and 3 non-bank lenders have successfully joined the scheme as finance providers and more finance providers are expected to join in the coming weeks. This long-term policy goal of diversification will add competition in the market and ensure a wide range of loan products being available.

A total of 4,702 loan applications for a value of €314 million have been submitted up to 18 February to all participating lenders with 3,106 loans drawn for a value of €177 million. A total of 4,556 loan applications with a value of €298 million have been submitted to the three participating commercial banks (Bank of Ireland, AIB and Ulster Bank) with 3,091 loans drawn for a value of €175 million. Loans take a number of working days to move from application status to drawdown or refused status. I would encourage businesses to use this scheme to obtain loans at interest rates below market rates.

Where an applicant has had a loan application refused, they may wish to appeal the decision to the Credit Review Office (CRO). The CRO helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks. This is a strictly confidential process between the business, the Credit Review and the bank.

While the State provides a guarantee on loans issued in case of default, all credit assessments in relation to loan applications under this scheme are carried out by participating lenders. The Department plays no role in the application or decision-making process in relation to loans under Government schemes, which, is fully delegated to the participating lenders.

I want to assure the Deputy that I and my officials are monitoring the Scheme and its effectiveness. Data is being published on a monthly basis on my Department’s website regarding the level of lending through the scheme, the sectoral breakdown and the uptake on a county basis.

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