Niall Collins
Question:190. Deputy Niall Collins asked the Minister for Finance the lending targets the SBCI set for lending to SMEs in 2017. [38299/17]
View answerMonday, 11 September 2017
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Written answers
The Strategic Banking Corporation of Ireland (SBCI) is Ireland’s National Promotional Institution for SMEs and its strategic mission is to deliver effective financial supports to Irish SMEs that address failures in the Irish credit market, while driving competition and innovation and ensuring the efficient use of available EU resources. The SBCI achieves this aim through the provision of low cost liquidity and risk sharing activities supporting the provision of appropriately priced, flexible funding to SMEs.
The SBCI does not lend directly. Rather, the SBCI provides appropriately priced, flexible funding to SMEs via its partner finance providers, known as on-lenders, through the provision of low cost liquidity and risk sharing activities. The SBCI currently has three bank and four non-bank on-lenders: AIB; Bank of Ireland; Ulster Bank; First Citizen Finance; Finance Ireland; Bibby Financial Services Ireland and FEXCO Asset Finance.
The SBCI began lending in March 2015; to the end of June 2017, the SBCI has supported loans totalling €855 million to 21,132 Irish SMEs employing 106,728 people. I am pleased to note that this represents an increase of 57% in SBCI lending since the end of December 2016. It is also very encouraging to note that the interest rate on SBCI loans is, on average, 1.15% lower than the average market interest rate on loans to SMEs and that 85.1% of SBCI loans are to SMEs based outside of Dublin.
The SBCI expects to announce further on-lenders in 2017. It also intends to build further on the risk-sharing aspect of its business model, allowing it to improve the risk appetite of partner finance providers and address new market failures in the SME finance market. The SBCI will do this through its operation and management of the Credit Guarantee Scheme and through the use of European financial instruments
The SBCI’s lending to SMEs is largely driven by market demands and needs that are not fully met by the private sector. The Deputy can rest assured that the SBCI is working to develop a more diverse range of on-lenders and innovative products. This will enable it to broaden its distribution capability and market coverage, meet the evolving requirements of the SME finance market and contribute to a sustainable and competitive economy.