Update: Banking Facilities for Enterprises, 25th June 2015

QUESTION NO:   271

DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)

by Deputy Bernard J. Durkan

for WRITTEN ANSWER on 23/06/2015  

  To ask the Minister for Finance the extent to which he can insure that alternative banking facilities remain readily available to enterprises where the lender may have withdrawn from the market, or proposes to do so; and if he will make a statement on the matter.

REPLY.

Since 2011 Government policy has focused on supporting SMEs in accessing an appropriate supply of financing from both bank and non-bank sources.

The following provides an overview of some incentives to encourage access to credit for small business:

– The Strategic Banking Corporation of Ireland has been established to encourage small business, as an additional means of ensuring that SMEs are provided with sufficient access to credit, with increased flexibility such as loans of longer duration and loans with built-in payment holidays. SBCI loans are currently available through AIB and BOI and subsequent phases will see the SBCI supporting smaller, existing bank and non-bank funding providers and bringing in new participants to the Irish market.

– The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs.    

– The Microenterprise Loan Fund, administered by Microfinance Ireland, was established under the Action Plan for Jobs and can provide loans of up to €25,000 to small businesses who have been refused credit by commercial banks. Microfinance Ireland works in partnership with the Local Enterprise Offices LEOs nationally to administer this fund.

– The Development Capital Scheme is aimed at addressing a funding gap for mid-sized, high-growth, indigenous companies with significant prospects for jobs and export growth.

– To develop the domestic venture capital system, the Government commitment of €175 million under the Seed and Venture Capital Scheme 2013-2018 aims to leverage a further €525 million from the private sector, for investment in high potential start-up and scaling companies.

– The Credit Review Office helps SME or Farm borrowers who have had an application for credit of up to €3 million declined or reduced by either Bank of Ireland or Allied Irish Banks, and who feel that they have a viable business proposition.     The Ulster Bank have recently joined the Credit Review office on a non-statutory and voluntary basis.   The Credit Reviewer John Trethowan and his team have overturned 55% of the refusals that have been appealed to the Office.   Further details are available at www.creditreview.ie

– With over €2bn of Government supports available to small business in Ireland from over 20 Departments and Agencies, it is vital that SMEs can quickly access information on this range of supports available to them. With this in mind, the Supporting SMEs Online Tool, a cross-government initiative, was launched in May 2014. On answering 8 simple questions, the small business will receive a list of available Government supports.     The Supporting SMEs Online Tool is available at www.localenterprise.ie/smeonlinetool

The Government remains committed to the SME sector and sees it as the key engine of ongoing economic growth.   Consequently the Department of Finance, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit with a view to taking appropriate actions as warranted to ensure that SMEs in Ireland have the opportunity to reach their full potential in terms of growth and employment generation.   In this context, the Action Plan for Jobs 2015 includes a dedicated chapter and associated integrated set of actions to support the financing for growth in the SME sector.