A new scheme for small businesses - employing up to ten people - who have been refused credit by the banks will be launched next week.
From October 1, a €90m microfinance scheme will start accepting and processing applications from businesses and sole traders who were refused credit for loans up to €25,000.
The scheme will initially facilitate €40m in additional lending over the next five years to businesses.
The scheme will then be extended to provide an extra €50m of lending over a further five years.
Richard Bruton, the Minister for Jobs, Enterprise and Innovation, said that over the lifetime of the scheme, it is expected that loans will be provided to 5,500 micro-enterprises with the creation of an expected 7,700 new jobs.
The scheme will be operated by Microfinance Ireland, a subsidiary of Social Finance Foundation, which was founded in 2007 by the Minister for Finance. Loans of up to €25,000 will be provided and the average loan is expected to be €16,000.
A statement from the Department of Jobs, Enterprise and Innovation said the scheme will be closely monitored and will be reviewed after two years of operation.
''Government does not create jobs - people and businesses do,'' Minister Bruton said. ''The role of Government, and the centre of our plan, is to make it easier for businesses to start-up, expand, succeed and create jobs,'' he added.
''As in the case of the Loan Guarantee Scheme, the Development Capital Scheme and the Innovation Fund, this is Government getting involved in filling gaps in the market and supporting viable businesses which can create the jobs we need,'' the Minister said.
ISME said today's announcement will give a much needed boost to micro businesses that have been ''ignored and starved of bank credit since the main banks were bailed out in 2008''.
''Micro businesses are in the front line of this prolonged recession and when funding was most needed, the banks reneged on their commitment necessitating this further government intervention. We now hope that this scheme will initially assist in retaining and ultimately increase employment in the ‘seed-bed’ of the economy'', ISME's chief executive Mark Fielding said.
''While the scheme will not be the ‘silver bullet’, it will certainly help some vulnerable but viable SMEs and allow them to survive, consolidate and in time, expand, with the positive result of increased employment,'' he added.
