Thursday, September 27 10:39:27
The Government today said that its E90 million Microfinance Scheme will be open for business from Monday next, 1st October with predictions that it will help create 7,700 new jobs over its 10-year lifetime.
From next Monday, applications from businesses and sole traders across all sectors employing up to ten people who have been refused credit by the banks for loans of up to E25,000 will be accepted and processed.
The Scheme will initially facilitate E40 million in additional lending over the next five years to businesses employing not more than 10 people, with provision for the scheme to be extended to provide an additional E50 million 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.
Over the lifetime of the ten-year Scheme it is expected that over E90 million in additional lending will be provided to 5,500 micro-enterprises with the creation of an expected 7,700 jobs.
The Scheme will be operated by Microfinance Ireland, a subsidiary company of Social Finance Foundation, which was founded in 2007 by the then Fianna Fail Government.
In order to be eligible for the scheme, a request for credit must first have been declined by the banks.
It 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.
The scheme will be demand-led and, in the initial 5-year phase, E10 million of Exchequer funding will be leveraged to achieve a total of E40 million in additional lending.
&#61472;In the initial 5-year phase, more than 2,700 microenterprises are expected to benefit from the scheme with the creation of 3,800 jobs, Minister for Jobs, Enterprise and Innovation, Richard Bruton, said.
Loans of up to E25,000 will be provided, and the average loan is expected to be E16,000.
An application will be made by Microfinance Ireland to the European Investment Fund for a guarantee to help optimise the State's investment, the Minister said.
"Government does not create jobs, people and businesses do. The role of Government, and the centre of our plan, is to make it easier for businesses to start-up, expand, succeed, and create jobs. The Government's Microfinance Scheme, which will provide up to E90 million in lending to 5,500 businesses which otherwise would not get credit, is a key part of this plan, and will help create over 7,700 jobs over the next ten years. As in the case of the Loan Guarantee Scheme, the Development Capital Scheme and the Innovation Fund, this is Government getting involved in filling gaps in the market and supporting viable businesses which can create the jobs we need," Minister Bruton said.