Government fails to draw down EU Microfinance Facility
The government has failed to draw down a facility from the EU for millions of euros of finance for small businesses according to Sinn Féin’s Peadar Tóibín.
In March of last year the EU established the European Progress Microfinance Facility. An initial budget of €100 million is expected to leverage to a total amount of €500 million in micro-credit. This will be realised in cooperation with the European Investment Bank (EIB) Group. The fund would supply loans of up to 25k to micro enterprises.
Today in the Dáil Sinn Féin Spokesperson on Jobs, Enterprise and Innovation Peadar Tóibín asked the government how much had been drawn down so far by the state from this programme to allow badly needed credit into the Irish small business sector.
Speaking afterwards Deputy Tóibín said:
“There are 180,000 micro-business employing 10 people or less in this state. This sector, more so than any other, is collapsing due to the evaporation of demand, rigid cost structures and the glacial flow of credit into the system.
“I asked the minister if it was true that the government has so far not drawn down any money from this micro finance scheme. The Minister refused repeatedly to answer. As a result I have contacted the EIF and have been informed that 11 countries have drawn down funds so far but Ireland is not one of them.
“This is a shocking situation given the epidemic level of business closure, the near half a million of people unemployed and the 70,000 people leaving the state last year that the government has remained completely inactive to date on this issue.” CRIOCH
By way of final answer Minister Jon Perry stated that First Step had drawn down funds from the European Investment Fund. This is true but First Step has not drawn down funds from the EU Progress Microfinance Facility.
First Step are a Not for Profit, non-governmental group who do excellent work providing lines of credit to mainly unemployed people when setting up a business. Last year they provided €1.5 million in total and have 3.5 employees. Due to capacity and through no fault of their own their ability to provide the level of microfinance on their own is however grossly disproportionate to the size of the problem.