Minister Nash said, “AAlmost 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.”

Welcoming the removal of the bank refusal requirement for applicants to MFI, the new Chair Cyril Forbes said: “The Government's removal of the bank rejection requirement is great news for jobs. Add to this closer collaboration with the Local Enterprise Offices, and it will be easier for those requiring credit to access the Microfinance Loan Fund. It will further enhance our ability to “put air in the tyres" of entrepreneurs and micro businesses and ensure that all viable, genuine and credit worthy projects or individuals shall be given access to affordable funds through MFI.”

Businesses from any sector can qualify for Microfinance Ireland funding as long as they have less than 10 employees and a turnover of less than €2million per annum. They can apply for loan funding from €2,000 up to €25,000.

Microfinance Ireland is a 100% owned subsidiary company of the Social Finance Foundation and is a private not for profit entity which has been mandated by Government to deliver its statutory based Microfinance Loan Fund.

The EPMF fund from the European Investment Fund covers some of the risk by providing a partial guarantee against its portfolio of lending. The EPMF (European Progress Microfinance Fund) is a Europe-wide fund that underwrites some of the risk taken on by organisations like Microfinance Ireland.