Dáil Éireann Debate, Thursday - 23 June 2016
18. Deputy Eugene Murphy asked the Minister for Finance if he is concerned by the relatively low level of lending undertaken by the Strategic Banking Corporation of Ireland to date, and the corresponding average loan size; and if he will make a statement on the matter. [17534/16]
View answerSmall and Medium Enterprises (SMEs) are the lifeblood of the Irish Economy. They make up the vast majority of businesses in Ireland and account for approximately seven in every ten jobs. Supporting the finance needs of these businesses is therefore a priority for this Government.
The Strategic Banking Corporation of Ireland (SBCI) was incorporated in September 2014 and its goal is to ensure access to flexible and lower cost funding for Irish SMEs. The SBCI launched its first product programme in February 2015 and lending to SMEs commenced in early March 2015 through its initial on-lending partners, AIB and Bank of Ireland.
Up to the end of December 2015, in its first nine months of operation, the SBCI lent some €172 million to approximately 4600 SMEs. The loans have been taken up by Irish SMEs for a variety of purposes and across a range of sectors in the economy. 84% of loans were for investment purposes and the average loan size is approximately €37,000. There is a wide geographical spread and the vast majority of loans are to regionally based SMEs outside Dublin.
To further meet the financing needs of SMEs, the SBCI has expanded the number of on-lending partners through which its funds can be accessed. The SBCI now has a total of six on-lending partners. These are AIB, Bank of Ireland, Ulster Bank, Merrion Fleet, Finance Ireland and First Citizen.
The increased number of on-lenders is a key step in creating greater competition for SME lending in the Irish market, by supporting smaller indigenous providers of finance and providing funding for a broader range of products, including Asset Finance, Leasing and Contract Hire. The SBCI is in advanced discussions with a number of other potential on-lenders.
I am pleased to note that of the SBCI's initial funding capacity of €800 million, €791 million has now been committed to its on-lending partners to support the financing needs of SMEs. The SBCI is currently in the process of securing additional funding from domestic and international sources to enable it to increase the amount of funds it can make available to SMEs.
The SBCI is committed to leveraging existing and new relationships with on-lending partners to support SME growth and investment. The SBCI has made significant progress to date, both in terms of providing funding to SMEs, and in building a strong infrastructure to provide long term support to SMEs.
Finally, the Deputy may be interested to note that the SBCI publishes information on its lending volumes to SMEs on a bi-annual basis. The figures to end June 2016 will be published in July 2016 and it is expected that the lending volumes will have increased significantly.
