Marian Harkin urges lower microfinance rates or longer moratorium

Thank you, Count Corlea. Minister, first of all, can I say I'm happy to have this opportunity to speak on the microfinance amendment bill. And for me, that's just a personal little bit. It shows a real connection between the EU and what goes on here. Because nearly 10 years ago, I was one of the rapporteurs in the European Parliament on the microfinance fund when we set it up to help microbusinesses. And indeed, it was an Irish woman, Mary Donnelly, who led for the Commission in those discussions. And we managed to pull together a fund that would help to support microbusinesses. And the reason for that was that we wanted to send a clear message that the EU would help to support small business. So therefore, it's really important that this fund delivers. Now, everyone in this House will agree that SMEs are the backbone of the economy. I think 99% of companies are SMEs. But I think most people might not be just quite as aware of the fact that 90% of companies and businesses in Ireland are microbusinesses. So they employ less than 10 people. And if we want to see those microbusinesses grow to become medium-sized businesses or larger companies, then we have to make sure that they can survive for this length of time. And I mean, all around us, Minister, we see the devastation that's caused by COVID. So it's crucial that these microbusinesses can access the liquidity they need and, of course, sufficient grant aid. Now, I'm not going to raise that issue now. I've raised it many times, the fact that we need a much better balance between grant aid and loans. But today, we're talking about microfinance. Now, I've discussed this with Minister Humphreys here on the floor of this House about the terms that are in place for the microfinance loans. It's between 4.5, 5.5 or 5%, I think. And there is a moratorium or a holiday for interest for six months. But, I mean, I've told her about many European countries, and I use the example of the Netherlands, where the interest rate on microfinance in the Netherlands is 2%. Now, I did a quick back-of-the-envelope calculation, which won't be a million miles out, shall we say. And if a company were to borrow €10,000 over three years, the difference in repayment, and that's, you know, accepting the six-month no interest, the difference in repayments, let's say, between a company here and in the Netherlands would be around €400,000 or €500,000. But if you were to look at €20,000 over five years, you'd see a much more significant difference of around €1,500. Now, that's a rough estimate. But the truth is that many microbusinesses may not be able to make that kind of profit, that kind of money, so that they can look at repaying their loans. So, in that context, I was pleased to see the amendment from Sinn Féin, which looks for 2%, perhaps I'm not supposed to discuss that now, but I don't know what stage we're at, but I'm in the middle of it. Anyway, a 2% interest rate, and they look for a 12-month moratorium on interest. So, my suggestion would be that even if you were to look at one or either of those, either bring the interest rate back to 2%, like, for example, they charge in the Netherlands, or, if you couldn't do that, look at the possibility of, instead of 6 months interest-free, to give 12 months interest-free, because that would be very welcome for a lot of companies. Now, I, like a lot of deputies here, looking forward to seeing what's in the July stimulus. But, you know, and I'm hoping to see big things, as it were. But I have to say that the way we have tailored this microfinance fund, to me, it's not responding to the real needs, at least of some of our microbusinesses. So, as I said, either lower interest rate or a longer period before interest is paid. And to me, this would make a huge difference to microbusinesses. I think it would give them hope, Minister. Because there's a lot of business owners out there right now saying to themselves, perhaps, will I apply for this loan? And part of the answer that they will find will depend on, can I afford to make the repayments? Will I make enough money to cover my costs, to pay my staff, PRSI, tax, whatever, and also make the repayments? And if we could lower those repayments by lowering the interest rate and or giving a longer period of time without interest, I think a lot of businesses would look on this more favourably. And I suppose the point that I think is important as well is that you obviously want these loans to be paid back. Well, the more feasible, or how would I put it, the lower the interest rate, it means that repayments are lower. And companies are, I think, more likely to repay their loans. I'm not suggesting companies won't repay their loans, but I'm saying it is easier for them to do so. So, Minister, I'll finish with that just to say once again, lower interest rate and or longer period of time without interest. Many micro-businesses will thank you for it because it will make a real difference to their chances of recovery because many of them know that when they start trading, it will take a significant period of time before they can get back to where they were. So, they have costs mounting all the time, the utility bills, the insurance, all of that sort of stuff. They're borrowing to cover that and they know their business will not start where it left off. So, a little bit of hope goes along to a lot of people out there who want to get back, who want to start working again, who want to get their companies up and running. And that's why I support the Sinn Féin Amendment. Thank you. Thank you.