Dáil Éireann Debate, Thursday - 12 July 2018
109. Deputy Billy Kelleher asked the Minister for Finance the approximate regulatory and administrative cost in addition to other potential costs of enabling the SBCI to lend directly to SMEs; and if the concept of relicensing the SBCI in order for it to develop branches for direct lending has been examined. [32110/18]
Amharc ar fhreagra110. Deputy Billy Kelleher asked the Minister for Finance the bank and non-bank on lender of SBCI funds in 2017 and to date in 2018; and the monetary amount loaned to SMEs in tabular form. [32111/18]
Amharc ar fhreagra111. Deputy Billy Kelleher asked the Minister for Finance the lending targets the SBCI has set for lending to SMEs in 2017 and 2018; and the progress to date on same. [32112/18]
Amharc ar fhreagraI propose to take Questions Nos. 109 to 111, inclusive, together.
The 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 competition, innovation and the efficient and effective use of EU resources and financial instruments. The SBCI achieves this purpose through both on-lending and risk-sharing activities.
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.
The SBCI does not set annual lending targets, however, during 2017 a total of €391m of SBCI facilities were drawn by SMEs. This included €145m of funding drawn under the SBCI Agriculture Cash Flow Support Risk Sharing scheme. Figures for 2018 have not been published at this point. Since inception, a total of €920m in SBCI funding and Guarantee products has been drawn by Irish SMEs.
Below, in tabular form, is a list of SBCI on lenders and the liquidity that they possess.
|
Date |
On Lender |
Liquidity |
Risk Sharing |
|
Dec-14 |
Bank of Ireland |
€200m |
|
|
Feb-15 |
Allied Irish Bank |
€200m |
|
|
Oct-15 |
Finance Ireland |
€51m |
|
|
Nov-15 |
Merrion Fleet |
€25m* |
|
|
Nov-15 |
Allied Irish Bank |
€200m |
|
|
Dec-15 |
Ulster Bank |
€75m |
|
|
May-16 |
First Citizen Agri Finance |
€40m |
|
|
Jun-16 |
Bibby Financial Services Ireland |
€45m |
|
|
Nov-16 |
Fexco Asset Finance |
€70m |
|
|
Jan-17 |
Bank of Ireland |
|
€65m |
|
Jan-17 |
Allied Irish Bank |
|
€60m |
|
Jan-17 |
Ulster Bank |
|
€25m |
|
Mar-18 |
Bank of Ireland |
|
€128m |
|
Mar-18 |
Allied Irish Bank |
|
€122m |
|
Mar-18 |
Ulster Bank |
|
€50m |
|
May-18 |
Bibby Financial Services Ireland |
€25m |
|
*Facility closed in July 2017 following the sale of Merrion Fleet to Société Générale
SBCI liquidity funding remains available through Finance Ireland, First Citizen, Bibby Financial Services Ireland and Fexco Asset Finance. The €300m Brexit Loan Scheme was launched in March 2018 and was allocated to AIB, Bank of Ireland and Ulster Bank as detailed above.
Amending the SBCI lending model to include a branch network to lend directly to SMEs is contrary to current Government Policy, which is for the State to exit the banking sector. The SBCI operates on a market neutral basis. The opportunity to obtain SBCI funding as an on-lender or to act as a financial intermediary participating in the SBCI’s risk-sharing guarantee schemes is open to any finance provider that can demonstrate that it fulfils the SBCI’s requirements through a standard, consistent and rigorous processes. Furthermore, in order for the SBCI to directly lend to SMEs, a change in legislation would have to occur and the SBCI would have to become a regulated entity with the Central Bank of Ireland.
In addition, as I am sure the Deputy is aware, there would be immediate State Aid and Competition issues that would have to be addressed. Currently the SBCI does not come into conflict with state aid rules as it does not directly lend, rather it acts as a wholesale financial institution providing low cost, long-term wholesale funding to both bank and non-bank finance providers. These on-lenders must in turn pass on the benefit of that low cost finance to the final SME borrowers.
Therefore no analysis has been conducted for such a proposal.
