Small firms will no longer have to obtain a bank refusal before seeking a loan from Microfinance Ireland (MFI). This requirement was viewed as an impediment for microenterprises seeking loan funding under the government-backed scheme.
MFI is currently working with the banks to develop an automatic referral system for microenterprises that are refused loans.
Welcoming the change, MFI's new chairman 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.”
Microfinance Ireland offers loans of up to €25,000. Almost 700 applications for credit from microenterprises have been approved by MFI since its inception in 2012, with the organisation advancing €10.5m in credit.
Businesses from any sector can qualify for Microfinance Ireland funding as long as they have less than ten employees and a turnover of less than €2m per annum. They can apply for loan funding from €2,000 up to €25,000.