New microenterprise fund to give €90m in lending to 5,500 Irish businesses
The Irish Government has revealed details of a new microenterprise fund scheme, which it expects will be operational in the early autumn. The fund will aim to provide more than €90m in extra lending to 5,500 businesses and create an additional 7,700 jobs over 10 years.
The scheme is targeted at start-ups, sole traders and existing microenterprises across all sectors that employ 10 people or less.
Loans of up to €25,000 will be provided, and the average loan is expected to be €16,000.
The Minister for Jobs, Enterprise and Innovation Richard Bruton, TD, revealed details about the scheme this morning following the publication of the Microenterprise Loan Bill on Tuesday.
He said the scheme is expected to be operational from early autumn. Apparently it will initially facilitate €40m in additional lending to businesses that employ 10 people or less over the next five years. There will then be the provision for the scheme to be extended to provide an additional €50m of lending over a further five years at that point.
Start-ups, sole traders and existing microenterprises will be eligible to apply for a loan under the scheme, which will be operated by Microfinance Ireland, a subsidiary of the Social Finance Foundation, itself founded in 2007.
In order for businesses to be eligible for the scheme, a request for credit must first have been declined by the banks.
The Government said the scheme will provide loans for commercially viable proposals that do not meet the conventional risk criteria applied by the banks for various reasons, including the absence of collateral.
In the initial five-year phase, the Government is anticipating that more than 2,700 microenterprises will benefit from the scheme, with the creation of 3,800 jobs.
Microfinance Ireland is also set to submit an application to the European Investment Fund for a guarantee to help optimise the State's investment.
The Microenterprise Loan Fund will be forming part of a suite of finance schemes provided through the Department of Jobs, Enterprise and Innovation, such as the €150m Credit Guarantee Scheme, the €125m invested by Enterprise Ireland through Innovation Fund Ireland to target high-growth, high-tech early-stage companies based in Ireland, and the €150m Development Capital Scheme, aimed at mid-sized, high-growth Irish companies operating in traditional sectors.
Bruton said this morning that employment is the Government's No 1 priority.
"The microenterprise scheme will ensure that over a 10-year period, 5,500 viable businesses which would not otherwise have got access to finance will now be able to access credit, expand, and create an additional 7,700 jobs," he said.
Bruton added that people who have a business idea, but lack the capital to get it off the ground, be they unemployed or already in a job, will now be able to access the finance that they need.
"It will also form part of a series of measures aimed at encouraging more people to start a business," added Bruton.
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