Dáil Éireann Debate, Tuesday - 22 January 2019
114. Deputy Billy Kelleher asked the Minister for Finance the targets the Strategic Banking Corporation of Ireland set for lending to SMEs in 2017 and 2018; and the progress to date on same in tabular form. [2406/19]
View answerThe Strategic Banking Corporation of Ireland (SBCI) is Ireland’s national promotional institution. The purpose of the SBCI is to deliver effective financial supports to Irish SMEs that address failures in the Irish SME finance market as well as encouraging and promoting competition and innovation, and the efficient and effective use of EU resources and financial instruments. The SBCI achieves this through the provision of low cost liquidity and risk-sharing guarantee activities that support the provision of appropriately priced, flexible funding to Irish SMEs.
The SBCI does not lend directly. Rather, the SBCI operates through its partner finance providers, known as on-lenders. The SBCI has provided funding to a mixture of both banks and non-bank finance providers; the SBCI currently has three bank and three non-bank on-lenders: AIB; Bank of Ireland; Ulster Bank; Finance Ireland; Bibby Financial Services Ireland and FEXCO Asset Finance.
The SBCI aims to ensure on-lenders and financial intermediaries maximise the benefit and the service provided to Irish SMEs as well as protecting taxpayer money and the investment of both State and European institutions. I am advised that the SBCI is keen to work with any lender, large or small, that can demonstrate it can deliver the required funding advantage to eligible SMEs on terms that protect taxpayer money.
The Strategic Banking Corporation of Ireland commenced its activities in March 2015. To the end of March 2018, the total amount of SBCI supported lending activity, including loans made under the SBCI’s risk-sharing guarantee Schemes, was €972 million to 24,002 Irish SMEs supporting 129,300 jobs. The SMEs who received SBCI finance are from all sectors of the Irish economy and have a wide geographical spread, with approximately 85% of loans going to small businesses based outside of Dublin.
The SBCI is currently seeking to broaden its distribution capability and market coverage thereby serving to meet the needs of Irish SMEs and encourage and promote competition in the SME finance market. The SBCI continues to work on developing new innovative products, such as the Brexit Loan Scheme, which was launched in March 2018. This €300 million scheme is to provide working capital support to SMEs to enable them to adapt and innovate in response to the challenges posed by Brexit.
Following on from launch of the Brexit Loan Scheme, a Future Growth Loan Scheme has been developed to provide long-term investment financing for Irish businesses to help them strategically invest in a post-Brexit environment. There is an absence of financing available for businesses in excess of seven years and the Future Growth Loan Scheme is intended to provide finance of eight to ten years for investment in process and organisational innovation, and investment in tangible and intangible assets on agricultural holdings linked to primary agricultural production. The SBCI recently launched an open call for participating finance providers to offer this Scheme through, which is expected to launch once successful lending partners have been appointed.
Chronological Table of SBCI Funds and Guarantees Committed to On-Lenders
|
Date |
On Lender |
Liquidity (Funds) |
Risk Sharing (Guarantees Provided) |
|
December 2014 |
Bank of Ireland |
€200m |
|
|
February 2015 |
Allied Irish Bank |
€200m |
|
|
October 2015 |
Finance Ireland |
€51m |
|
|
November 2015 |
Merrion Fleet |
€25m* |
|
|
November 2015 |
Allied Irish Bank |
€200m |
|
|
December 2015 |
Ulster Bank |
€75m |
|
|
May 2016 |
First Citizen Agri Finance |
€40m** |
|
|
June 2016 |
Bibby Financial Services Ireland |
€45m |
|
|
November 2016 |
Fexco Asset Finance |
€70m |
|
|
January 2017 |
Bank of Ireland |
|
€65m |
|
January 2017 |
Allied Irish Bank |
|
€60m |
|
January 2017 |
Ulster Bank |
|
€25m |
|
March 2018 |
Bank of Ireland |
|
€128m |
|
March 2018 |
Allied Irish Bank |
|
€122m |
|
March 2018 |
Ulster Bank |
|
€50m |
|
May 2018 |
Bibby Financial Services Ireland |
€25m |
|
|
Total |
|
€531m |
€450m |
*Facility closed in July 2017 following the sale of Merrion Fleet to Société Générale
**Facility closed in October 2018 following the raising of commercial funding by First Citizen Agri Finance.
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 in the medium to long term.
