Dáil Éireann Debate, Tuesday - 30 January 2018
153. Deputy Joan Burton asked the Minister for Finance his plans to review the operations of the Strategic Banking Corporation of Ireland, SBCI, and diversify the range of on lenders by SBCI; and if he will make a statement on the matter. [4159/18]
Amharc ar fhreagraThe Strategic Banking Corporation of Ireland’s, SBCI, mission is to deliver effective financial supports to Irish SMEs and, in time, other sectors that address failures in the Irish credit market, while driving competition and innovation and ensuring the efficient and effective use of available EU resources. The SBCI uses an on-lending model, meaning it does not lend directly. Rather, it channels its funds through lending partners known as on-lenders. The SBCI currently has three bank and four non-bank on-lending partners.
The SBCI began lending in March 2015. To the end of December 2017, €925 million of SBCI supported lending has been provided to 22,928 Irish SMEs, operating across all sectors of the Irish economy, including agriculture, food, retail, healthcare, transport and manufacturing.
The SBCI is actively engaging with a range of potential on-lenders, in particular, non-bank finance providers, to broaden its distribution capability and market coverage. This is subject to robust due diligence processes. The SBCI has an independent board and risk management committee responsible for making the decision to enter into an on-lending agreement. The SBCI's on-lender criteria are designed to mitigate risks to Irish taxpayers and European funding and to SME borrowers. They aim to ensure that all lending partners have the necessary financial strength and capability to provide the required level of service to SMEs along with sufficient protections for the taxpayer.
The SBCI is working to develop more innovative products, such as the Agricultural Cashflow Support Loan Scheme and the Brexit Loan Scheme I announced in Budget 2017 and Budget 2018 respectively. Additionally, the SBCI is also continuing to work on a number of initiatives, including the continued use of guarantees and risk sharing schemes to support lending by finance providers. These aim to address recognised market failures as well as the collateral limitations or SMEs and collateral obligations of banks.
The Deputy can rest assured that the SBCI is supporting the provision of appropriately priced, flexible funding to SMEs through a diverse range of finance providers, both bank and non-bank, thereby supporting a competitive and sustainable SME finance market.
