MFI lends just €1.26m but costs €1.1m

The cost of running the Government’s micro finance business funding initiative is almost equal to the amount of money that was actually lent to businesses, according to figures in a parliamentary question.

The set-up and running costs at the Micro Finance Ireland (MFI) came in at more than €1.1m with more than €500,000 of that spent on wages.

Despite the costs in its first year of operation, MFI only lent €1.26m to 79 businesses. MFI received a total of 224 applications, but only 45% were approved.

MFI incurred set-up costs of more than €250,000 which was broken down into legal costs of €113,000 prior to incorporation and a further €165,000 in project costs.

In response to a parliamentary question, the Minister for Jobs, Enterprise and Innovation Richard Bruton said: “I have been advised by MFI that the annual administration costs for MFI for the year to Dec 2013 are forecast to total approximately €900,000. Salaries are the largest component of MFI’s annual budget and are anticipated to total less than €500,000,” he said.

It was also revealed that MFI had spent €200,000 on marketing the services to potential customers.

A spokesperson for the company said that they were doing everything in their power to keep costs under control

Sinn Féin spokesperson for Jobs David Cullinane said the Government had taken a good idea and got it completely wrong.

“Sinn Féin called for and supported credit initiatives targeted at micro and start up enterprises. It now appears that this government have taken a good idea and failed to deliver.”