Demand for small loans from Microfinance Ireland increased by nine per cent by value in 2019, with the agency approving €5.4m in loans to 384 micro-businesses during the year.

The loans, of up to €25,000, helped support an extra 856 jobs, bringing the number of jobs supported by MFI since it was established to 4,800. Counties outside Dublin accounted for three-quarter of the new loans provided.

Chief executive Garrett Stokes said: “Despite an improved economy and availability of bank funding, there is still significant growing demand for Microfinance Ireland loans. This strong growth highlights the ongoing need for the services MFI provides to startups and small businesses that are still finding it difficult to obtain credit through the banks.

“Since we commenced trading six years ago, we have had proposals from 4,465 businesses and have approved loans totalling €28m to 1,951 firms. We have supported almost 5,000 jobs in every county in Ireland. At this stage in our evolution we are receiving in excess of 1,000 applications a year, and through our lending activities supporting about 1,000 jobs per year.”

Minister Pat Breen commented: “Microfinance Ireland plays a very important role in providing an alternative source of funding to micro-enterprises who may be having difficulties in accessing finance from commercial providers. The increased demand for its services reflects the continued value of the initiative.

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“I would encourage all microenterprises in need of finance of up to €25,000 to consider Microfinance Ireland’s offering. Details can be had either directly from Microfinance Ireland or through the network of Local Enterprise Offices.”
Microfinance Ireland provides alternative funding to micro-enterprises which may be having difficulties in getting finance from commercial providers. MFI offers four separate loan packages, ranging from €2,000 to €25,000, to startups or established businesses that want to scale up. 

MFI’s standard interest rate is fixed at 7.8% APR. This is reduced to 6.8% fixed APR for applications received through Local Enterprise Offices, local development companies and banks.

Micro Research

According to new research from University College Cork and UK Enterprise Research Centre, for 70% of owner-manager in firms employing one to nine people, keeping the business ticking over will do just fine.

However, the UCC/ERC research also found that there is some ambition coursing through the mainstream, with one in four of the micro cohort stating that they want to build a national or international firm.

Four out of ten micro-business owners are growing their business with a view to exiting. In the west of the country, this objective was expressed by 80% of respondents, while in Dublin the figure was 45%.

Micro-firms in the Galway, Mayo and Roscommon region are amongst the most ambitious in the country, while enterprises in the border region tend to have a low ambition profile, according to the report’s metrics.

Photo: Garret Stokes (right) and minister Pat Breen with Cyril Forbes, chairman of Microfinance Ireland. (Pix: Iain White/ Fennell Photography