Taoiseach Enda Kenny Tánaiste Eamon Gilmore and Jobs Minister Richard Bruton today announced that a new Credit Guarantee Scheme would provide €450m in lending for small business over the next three years.
The announcement was made as the Quarter 3 Action Plan for Jobs report was published, showing 87% of measures had been achieved. All actions scheduled for delivery in Q1 and Q2 have now been implemented, meaning an overall implementation rate of 96% so far this year.
The Credit Guarantee Scheme aims to provide much-needed credit to job-creating SMEs who currently struggle to get finance from the banks. It is intended to address market failure affecting commercially viable businesses in two specific situations – namely, where businesses have insufficient collateral, and where businesses operate in sectors with which the banks are not familiar. It provides a 75% State guarantee to banks against losses on qualifying loans to firms with growth and job creation potential.
Initially, the scheme will facilitate up to €150m of additional lending per annum to SMEs, in addition to the lending targets set for the pillar banks. The Scheme will be demand-led, and take-up and performance will be closely monitored.
For every €150million of additional lending, the Scheme is expected to benefit over 1800 businesses and create over 1300 jobs.
The Taoiseach said:
Getting Ireland working again remains the top priority of the Government and in the Action Plan for Jobs we have an essential tool in building the new economy. Through the Action Plan we will add to the growing trend of private sector job creation which builds on the 17,000 private sector jobs created since March 2011...
I am delighted that the Credit Guarantee Scheme is being launched this morning. The Government recognises that the small business sector will be essential to our mission of getting Ireland working again. Alongside the recently launched Microfinance Scheme, the work through the Credit Review Office and directly with the Banks, the Scheme is part of the suite of measures the Government is undertaking to improve access to finance for small businesses.
The Tánaiste said:
Promoting growth and job creation remains our biggest challenge as a country and as a Government. We must continue to pursue a wide range of strategies to ensure that we create the right environment for job creation.
Today’s launch of the Credit Guarantee Scheme is another important step forward.
Minister Bruton said:
Access to credit remains a key issue for many businesses, and if we are to see the growth and jobs we need, Government must to act to fill gaps where specific market failures exist...
The Credit Guarantee Scheme will benefit innovative, job-creating businesses that face obstacles accessing credit because they do not have enough collateral, or because they operate in sectors which the banks are not familiar with.
For more details on the Action Plan for Jobs report and the Credit Guarantee Scheme read the full press release here.
Read the Taoiseach's speech here.
Read the Tánaiste's speech here.