A £208 million soft loan fund aimed at small and medium sized businesses is set to create almost 8,000 new jobs. The lion's share of the funding went to services businesses, who were able to apply for such a scheme for the first time.

More than one quarter (27 per cent) of the funding went to tourism projects, while almost 40 per cent was taken up by the services sector, according to figures published last night.

The scheme, known as the Access to Finance Scheme, was launched in 1995 by the Minister for Enterprise and Employment, Mr Bruton. It provided subsidised loans at 6.5 per cent over seven years.

Announcing the results yesterday, Mr Bruton said the employment creation forecasts associated with the projects emphasised the key role which the small business sector plays in creating jobs.

"The new investments will help to sustain recent employment gains into 1997 and beyond," he said.

Last night the Small Firms Association (SFA) called for a new loan scheme for small firms. SFA director Mr Brendan Butler said there was clearly a need for further schemes. A recent survey by the association established that bank overdrafts were the number one source of finance used by small firms, he said.

"Clearly this is not the most appropriate financing option and small firms' number one requirement remains access to long term low cost finance," he said.

The scheme was run in conjunction with the EU, the Exchequer and the participating banks - National Irish Bank, Bank of Ireland, Ulster Bank and Allied Irish Bank. Each contributed to the cost of providing the loans. Fifty per cent of the subsidy was carried by the participating banks and the other half was funded by the EU and the Exchequer.

Aimed at businesses with fewer than 50 employees and an annual turnover of under £3 million, the loans ranged in size from £20,000 to £500,000.