The banks are moving away from a central role in SME funding, but the €2.5 billion worth of State-supported funds in place still need improvement, Jobs and Enterprise Minister Richard Bruton said yesterday.
Addressing the Joint Oireachtas Committee on Jobs, Enterprise and Innovation, Mr Bruton said that the Government needs to ensure it is creating effective instruments to meet funding gaps to the small business community.
He said there is “a need to evolve alternative funding instruments”, adding that the growing number of schemes — including the Innovation Fund, the Credit Guarantee Scheme, the Micro-finance Fund, the Loan Guarantee Scheme and money from the National Pension Reserve Fund and Enterprise Ireland — means that there is a shift away from the mainstream banks as a primary source of SME funding.
While access to finance remains a huge challenge to small businesses, Mr Bruton noted that latest figures showed a declining rate of credit refusal from lenders and the first time that new credit flows have increased to SMEs in two consecutive quarters since the beginning of the recession.
In response to Fianna Fáil Deputy Dara Calleary, who noted that Ireland had, in EU terms, room for improvement in making it easier for small firms to win Government tenders; the minister said improvements have been made since the last progress report two years ago. His appearance, yesterday — along with minister of state for research and innovation Sean Sherlock — was ostensibly to promote the agenda of this week’s European Competitiveness Council meeting, aimed at improving industrial policy across the EU.
Mr Bruton said his department has begun a review of the Credit Guarantee Scheme, to study whether its terms should be improved. He also wants to build on the early results of the Micro-finance Fund, which has seen an approval rate of just over 40%.
Regarding procurement, Mr Bruton claimed that while obstacles like high insurance thresholds are being fought, things aren’t as bleak as is made out, with 98% of recent Government tenders going to Irish firms. Source: The Examiner.