Ireland’s National Pensions Reserve Fund (NPRF) has announced the availability of three new long-term funds to provide equity, credit and investment for small and medium-sized enterprises (SMEs).
Finance Minister Michael Noonan welcomed the news, having first referenced the funds in his Budget speech last month. He said: “The government is determined to do everything in our power to assist SMEs to grow and take on additional staff as it is only through the growth of the SME sector that we will address the unemployment crisis.”
Finance Department figures show that SMEs make up over 99% of businesses in Ireland and account for almost 70% of total employment. Two of the NPRF funds will focus on businesses that either have over-leveraged balance sheets or businesses that are underperforming and can be turned around. The third fund is focused on larger SMEs that require credit.
Noonan believes that the funds will complement the Ten Point Tax Reform Plan for SMEs introduced at the Budget. Included in the plan are corporate tax relief for start-ups, changes to the research and development (R&D) tax credit, and to value-added tax (VAT) thresholds.
Further funding is being made available to SMEs from Ireland’s pillar banks. Noonan has announced that both AIB and the Bank of Ireland met their commitment to make credit of EUR3.5bn (USD4.7bn) available to SMEs in 2012. He expects a further EUR4bn of credit to be made available by these banks this year.
Noonan also confirmed that he will unveil proposals for refocusing the NPRF “on investments in the Irish economy that will support job creation and drive economic growth.”