MONEY THAT was pledged to support Irish small and medium enterprises through the European Investment Fund (EIF) has not materialised, the Professional Insurance Brokers’ Association (Piba) has said.
On June 16th, the European Commission held an “EU finance” day for SMEs in Dublin, where James McGing of the economic and financial affairs section of the European Commission publicised the existence of a €1.1 billion Europe-wide fund.
The fund, which comes under the Competitiveness and Innovation Framework Programme 2007-2013, was intended to be used by banks to guarantee loans to SMEs. People at the conference were directed to a website, www.Access2finance.eu, for more information. However, the website currently states that there is “no source of EU-supported loan finance in Ireland yet”.
Piba chairman Michael Hoare said the fund was “non-existent”. Despite the publicity surrounding the money, no Irish business had been able to avail of a loan with the backing of this fund, he added.
The issue was also raised on a number of occasions by TD Chris Andrews during a meeting of the Oireachtas joint committee on enterprise, trade and employment last Wednesday, which heard submissions from Chambers Ireland, Enterprise Ireland, the Central Bank, AIB and Bank of Ireland on the issue of financing Irish businesses.
When asked by Mr Andrews about Bank of Ireland’s response to the fund, Bank of Ireland’s Denis McArdle said he was not aware of the fund.
AIB’s representative said the bank was currently in negotiations with Europe about the EIF funding. He said the European Commission wanted to pilot the programme in Ireland, and was currently working out the framework of how it would operate.
Mr Andrews also questioned the two banks about the separate €350 million development loans provided by the European Investment Bank to Irish banks to finance investment projects by small businesses, which was announced last March.
Mr McArdle said Bank of Ireland only received that money at the end of June and so far €100,000 has been sanctioned. AIB said that €5 million had been made available to customers and the bank was in discussion about a further €12 million. However, the representative pointed out that the fund was for capital investment rather than working capital, which is what most SMEs needed.
Mr Andrews said that perhaps the criteria for eligibility should be broadened. “At the moment that money is just lying there. SMEs should be allowed to access the money for working capital, particularly when so many businesses are in need of funding,” he said.
