Wednesday, September 03 16:40:04
The Hardware Association Ireland (HAI) has urged the Government to revamp the Microenterprise Loan Fund scheme because the current take-up is far off the original targets.
In its submission for Budget 2015 the HAI says that the existing Microenterprise Loan Fund scheme, which was introduced in October 2012, was originally intended to provide over E90m in extra lending to 5,500 businesses and create an estimated 7,700 jobs over a ten year period.
The latest report up to 31st March 2014, after a year and a half in operation, shows that only E3m in loans has been approved and 437 net jobs created in 192 businesses. Only 51pc of applications were approved and 83pc of the approvals were for businesses employing 3 people or less.
"These figures are so far off the original target that it is clear a revamp is required," says HAI President, Patrick Kelly.
The current eligibility thresholds for micro businesses are that they have been declined bank credit, employ less than 10 people and have turnover less than E2m.
"These should be changed to include those companies employing up to 20 employees with a turnover of up to E5m," says the HAI.
"The loans available of between E2,000 and E25,000 are welcome, but must be promoted and made available to all companies within retail, especially in our hardware, building material, DIY sector where the economic downturn has been most evident," said Mr. Kelly.
"Local Enterprise Offices must work in partnership with Micro Finance Ireland to proactively assist with training and guidance in preparing the applicant's business plan. This includes initial evaluation of the quality of the business proposal for the loan application, mentoring and advice on an on-going basis," he said.
In its budget submission the HAI also urges the Government to look seriously at two stimulus schemes introduced by the UK Government, which support house building and the availability of credit for small builders.
One is a mortgage insurance scheme, which the HAI believes is already under consideration by the Department of Finance based in part on the Help-to-Buy scheme in the UK, which has been a success, in particular outside London.
HAI says that help-to-buy should be thought of in terms of help-to-build also. The availability and accessibility of appropriately zoned land to meet current demands is vital. Unlike the UK where the threshold is Stg600,000, HAI recommends that the threshold for an Irish scheme should be lower to focus first on the family-type home in areas of need and disadvantage.
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