Microfinance Ireland has announced a new scheme for microenterprises affected by Covid-19, with loans of up to €25,000 available.
State-backed lending group Microfinance Ireland (MFI) has announced a new Covid-19 fund to support microenterprises – companies that have less than 10 employees – affected by the Covid-19 pandemic. The fund, worth a total of €15m, will allow for businesses to receive loans of up to €25,000 with a three-year term.
As part of the agreement, the business does not make repayments or pay interest on the loan in the first six months. The interest paid in months seven to 12 after the start of the loan will be refunded by the Government in month 13, once repayments in those six months have been paid in full.
The interest rate for these loans will be 4.5pc if they are applied for through a Local Enterprise Office or other referral partner. There will be an interest rate of 5.5pc fixed APR if applications are made directly to MFI.
Demand ‘exceeded all expectations’
“Since March, demand for MFI loans, particularly the Covid-19 loans, has exceeded all expectations, resulting in all funds being fully subscribed some weeks ago,” said MFI’s CEO, Garrett Stokes.
“We can see where the demand is coming from most and our new Covid-19 loan scheme has been tailored to meet the ongoing needs of those microbusinesses as they navigate their way through the current challenges and beyond.”
MFI chair Cyril Forbes added: “MFI appreciates these additional Government funds that enable us to do what we do best, supporting, sustaining and protecting microenterprises and the jobs they create, in every town and county in Ireland.”
In July, Tánaiste Leo Varadkar, TD, introduced a bill to the Dáil to amend an existing law that prevented MFI from providing increased funding to SMEs.
The initial Covid-19 Microfinance Ireland Loan was fully subscribed by July. Prior to suspending the fund, MFI said it had supported 687 businesses with approximately €20m in loans approved. MFI also provided 760 of its existing customers with loan moratoriums and loan restructures.