New Microfinance Loan Fund to encourage greater lending to microenterprises
Minister Nash announces new Microenterprise Loan Fund to encourage greater lending to microenterprises
Minister also welcomes new board of the new Board of Microfinance Ireland
Minister for Business and Employment Ged Nash T.D. today (Friday 25th September) announced a new Microenterprise Loan Fund Scheme which is aimed at encouraging more companies of less than ten employees to avail of the loan scheme. This fund is operated by Microfinance Ireland (MFI) and offers loans of up to €25,000.
Under the new scheme, microenterprises will no longer have to obtain a bank refusal before seeking a loan from MFI. This requirement was viewed as an impediment for microenterprises seeking loan funding under the Government backed scheme.
Minister Nash said, “Almost 700 applications for credit from microenterprises have been approved by Microfinance Ireland since its inception in late 2012. It has provided more than €10.5m in funding to companies who may not have been able to secure credit elsewhere and supported 1,550 jobs.”
“However, the requirement for microenterprises to obtain a bank refusal before seeking finance from MFI has proven to be an unnecessary obstacle. I am pleased to say that this requirement has now been removed, as recommended in the recent review of MFI, meaning a microenterprise can now apply directly to MFI for funding.”
The review of the Microenterprise Loan Fund was completed earlier this year. It was undertaken in order to establish the reasons for the lower than expected number of applications received by MFI at that stage. Other recommendations arising include:
- Introducing an automatic referral system to MFI for all bank declined
loans which fall within the loan limits offered by MFI;
- Providing a more flexible and adaptable framework for the Board of MFI to work within;
- Continuing with the promotion, advertising and awareness raising of the Fund by MFI.
MFI is currently engaged with the banks on developing an automatic referral system for microenterprises that are refused loans. It is also continuing with its promotion, advertising and awareness raising campaigns.
It is expected that the MFI Board will bring proposals for consideration by the Department of Jobs, Enterprise and Innovation and the Department of Public Expenditure and Reform in relation to the making of a more flexible and adaptable framework within which the Board can work.
Minister Nash also thanked the outgoing Board of MFI, “I wish to place on record my gratitude to the first Board of Directors of Microfinance Ireland, under the Chairmanship of Geraldine Kelly. It has been a remarkable achievement for the Board to have established
MFI from scratch and it is through the hard work and commitment of the Chair and Board of Directors in addition to the staff of the organisation that MFI is the success it is.”
Following the first meeting of the new Board of Directors of MFI, Minister Nash said, “I wish the new Board under the Chairmanship of Cyril Forbes well in their work on the next phase of development for MFI. It is clear that the bar has been set high for them by the previous Board of Directors but I have no doubt that they are up for the challenge ahead.”Source: www.localenterprise.ie
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