Tuesday, 18 June 2019

Ceisteanna (132, 133)

Billy Kelleher

Ceist:

132. Deputy Billy Kelleher asked the Minister for Finance the details of bank and non-bank on lender of SBCI funds in 2018 and to date in 2019; and the amount loaned to SMEs in tabular form. [24840/19]

Amharc ar fhreagra

Billy Kelleher

Ceist:

133. Deputy Billy Kelleher asked the Minister for Finance the lending targets the SBCI set for lending to SMEs in 2018 and 2019, in tabular form; and the progress to date on same. [24841/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 132 and 133 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 to address gaps and potential failures in the Irish SME finance market as well as encouraging competition and innovation, and facilitating 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.

Instead of lending directly to SMEs, the SBCI operates through partner finance providers, known as on-lenders. The SBCI has provided funding to a mixture of both banks and non-bank finance providers and currently has 6 on-lenders, 3 bank and 3 non-bank finance providers: AIB, Bank of Ireland, Ulster Bank, Finance Ireland Limited, Bibby Financial Services Ireland, and FEXCO Asset Finance. Additionally in 2018, the SBCI had a further non-bank finance provider as an on-lender, First Citizen Agri Finance. This facility was closed in October 2018 following First Citizen Agri Finance raising commercial funding.

Please see the following table of liquidity funding and guarantees provided by the SBCI to its on-lenders since March 2015, to date.

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

Dec 2018

Finance Ireland

€75m

*Facility closed in July 2017 following the sale of Merrion Fleet to Société Générale

**Facility closed in October 2018 following its raising of commercial funding.

The SBCI has forwarded updated figures to my Department that show, to the end of December 2018, the total amount of SBCI supported lending activity (through the provision of liquidity) was €900 million to 21,783 Irish SMEs supporting 141,658 jobs. Under the SBCI’s risk sharing schemes, €152 million has been drawn down by 4,278 SMEs supporting 6,572 jobs.

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 and opportunities posed by Brexit. From the launch of the scheme on 28 March 2018 to 12 June 2019, the SBCI has received 645 applications. Of these, 582 have been deemed eligible and can proceed to one of the participating finance providers for a loan under the scheme. 139 SMEs have progressed to sanction at finance provider level to a total value of €30, 566,300.

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 addressing that gap providing loans of eight to ten years. SBCI's open call to financial institutions for designation as a lending partner closed on 11 February 2019 and the scheme was launched on 27 March. The SBCI began accepting eligibility applications from SMEs on 17 April 2019.

The SBCI’s focus is meeting the credit needs of SMEs that are not currently being fully met by the private sector. 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.