Credit Guarantee (Amendment) Act 2016

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Power of Minister to give guarantees

5. The Principal Act is amended by the substitution of the following section for section 4:

“4. (1) Subject to this section and section 12 of the Credit Guarantee (Amendment) Act 2016, the Minister may, in accordance with a credit guarantee scheme, enter into an agreement with a participating finance provider guaranteeing the due repayment or payment, as the case may be, to that participating finance provider of such part of the credit amount under a qualifying finance agreement as is specified in the first-mentioned agreement.

(2) Subject to subsection (3) and section 12 of the Credit Guarantee (Amendment) Act 2016, the Minister shall not, pursuant to a guarantee under this section, be liable, in relation to any particular qualifying finance agreement, to pay an amount exceeding 80 per cent of the credit amount that—

(a) the participating enterprise concerned stands liable, for the time being, to pay to the participating finance provider concerned, and

(b) stands unpaid.

(3) The Minister shall not exercise the powers conferred on him or her by this section in such manner as would result in his or her being liable, in respect of qualifying finance agreements entered into by the same participating finance provider, to pay to that participating finance provider amounts the aggregate of which would exceed 13 per cent of the aggregate of the credit amounts under those qualifying finance agreements.

(4) The Minister shall not exercise the powers conferred on him or her by this section in such manner as would result in the yearly credit amount to which guarantees under this section apply exceeding €150 million.

(5) The Minister shall, in relation to a credit guarantee scheme, after consultation with the participating finance provider concerned, and by notice in writing given to the provider, specify the maximum value of financial products that may be provided by that provider pursuant to qualifying finance agreements—

(a) entered into in any year, and

(b) to which guarantees under this section apply.

(6) The Minister may notify a participating finance provider in writing that an agreement entered into by the Minister with the participating finance provider under this section shall not apply in relation to one or more classes of qualifying finance agreements (in this section referred to as “new finance agreements”) entered into by the participating finance provider after such date as may be specified in the notice.

(7) An agreement under this section shall not apply to new finance agreements.

(8) In this section ‘yearly credit amount’ means, in relation to any particular year, the aggregate of all credit amounts in respect of all qualifying finance agreements made in that year.”.