Forfas 2009 - The National Documentation Centre on Drug Use

Access to Finance
Credit insurance plays an important role in providing protection to sellers against all or part
of the risk of payment default by a buyer. During <strong>2009</strong>, withdrawal and reduction of short
term credit insurance covering a period of less than two years by private credit insurers
presented a significant and complex problem. It affects both sellers who want to ensure that
they receive payment and buyers in their ability to secure and fund their inputs from
suppliers. <strong>The</strong>se credit insurance problems are a recent development closely linked to
uncertain global and domestic economic conditions, where private credit insurers are acting
to reduce their risk exposure.
At the request of the Department of Enterprise, Trade and Employment (DETE) and following
extensive consultation, Forfás and Enterprise Ireland identified and assessed a range of policy
options to alleviate the problems being experienced in relation to credit insurance. <strong>The</strong>
assessment showed that the impact of a state-supported export credit insurance scheme
would be limited, given the likely high cost to the State of introducing an export credit
insurance scheme, the forecasted significant increase in default rates and the increased
premium cost to companies.
Access to finance is of critical importance to enterprise. Ensuring an adequate supply of
funding to Irish enterprises, including small and medium sized enterprises, is a prerequisite
for recovery. <strong>The</strong> current published official data limits the level of analysis that can take
place on credit availability, particularly the measurement of “new” credit. Forfás proposed
improvements in the data quantification and analysis of credit supply and demand:
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Forfás has been an active member of the Government’s Credit Supply Clearing Group
comprising industry representative associations and the banks, since its formation in
May <strong>2009</strong>.
Forfás submitted a proposal and engaged in discussions with Mazars on how official data
on credit supply and demand could be improved for the Review of Lending to SMEs
report, published in July <strong>2009</strong>. This was reflected in the Mazars report
recommendation to improve future credit supply and demand data gathering.
At the request of the DETE, Forfás has engaged with interested parties to understand
and monitor current and future lending to enterprise. Work in this area is ongoing and
will be important in ascertaining the best way to ensure that enterprise has sufficient
credit to facilitate investment, trade and employment.
Forfás Budget Submissions
<strong>2009</strong> Supplementary Budget
Forfás submitted its taxation and expenditure priorities in advance of the April <strong>2009</strong>
Supplementary Budget to the DETE, following engagement with IDA Ireland, Enterprise Ireland
and SFI. <strong>The</strong> submission focused on:
Maintaining competitiveness and ensuring the overall cost of doing business in Ireland
does not increase, including improvements to the tax treatment of intangible assets;
and
Continuing to invest for the future and to build the knowledge economy.