Microfinance fund ‘fails areas in need’

The operation of the Government’s microfinance fund is piecemeal and is failing those areas with the highest levels of need, according to Sinn Féin’s Peadar Tóibín.

The TD was responding to new figures showing that applications for micro-finance through county and city enterprise boards have only a 39% approval rate to date.

According to figures provided by Minister for Jobs, Innovation and Enterprise Richard Bruton, 72 applications routed through the enterprise boards have been processed. with 28 of these successful.

The figures show that the largest number of applications has been made through Limerick County Enterprise Board, with 11 seeking €212,494 in funding.

Mr Bruton said four of those applications have been successful, securing €54,499 in funds.

Boards to grant three applications are Dublin City and Fingal County Enterprise Boards.

Mr Bruton said that of the 97 applications lodged with enterprise boards, seeking €1.84m in funds, €469,989 has been granted.

He added: “It is my intention that progress reports on the Microenterprise Loan Fund will be published via the MFI website microfinanceireland.ie and on my department’s website, enterprise.gov.ie on a quarterly basis. Quarter 1 progress report for the period Jan 2013 to Mar 2013 will be made available in mid-April, with subsequent quarterly reports made available in mid-July, mid-October and mid-January 2014.”

Explaining the funding that has been set aside for the microenterprise loan fund, Mr Bruton said: “On 24 Nov 2011 the Government approved the allocation of €10m in the form of a non-repayable grant as seed capital for the Microenterprise Loan Fund.

“The allocation of €10m to Microfinance Ireland was met from savings in the vote of my department.

“Using an initial five-year horizon, this €10m seed capital, supplemented by a further €15m bank borrowing in tranches of €5m over years two, three and four, is expected to generate €40m in loan expenditure andcreate 3,800 jobs over a five- year period. To date, no private sector financing has been utilised, but Microfinance Ireland, through its parent Social Finance Foundation, has been engaged in discussions with banks in recent months with a view to obtaining loan funding during the summer of 2013.”

In response, Mr Tóibín said: “The Government needs to get its act together, challenge the banks on their failure to led to SMEs, and get this fund up, running and lending to businesses.”