Dáil Éireann Debate, Wednesday - 3 February 2021
27. Deputy Pearse Doherty asked the Tánaiste and Minister for Enterprise, Trade and Employment if he will consider reallocating the remaining capacity under the future growth loan scheme in order that fully subscribed lenders are in a position to lend under the scheme to business customers who wish to avail of the scheme; and if he will make a statement on the matter. [5649/21]
Amharc ar fhreagraThe Future Growth Loan Scheme makes lending available to SMEs and small mid-caps (up to 499 employees) seeking financing for long-term strategic investment, including in response to the impacts of Brexit and COVID-19.
The volume of lending allocated to each lender was determined as part of a competitive “open call” process operated by the Strategic Banking Corporation of Ireland (SBCI). The European Investment Fund [EIF], acting as counter-guarantor to the scheme, subsequently approves the allocations based on its review of the lenders.
One of the objectives of the open call process is to stimulate competition across lenders. Another benefit of the scheme’s being offered through multiple participating lenders is to ensure a wider reach to the SME base and the differing cohorts of business that may have a financing requirement; for example, individual banks may have a focus on a given sector or type of business.
The full capacity of the scheme has been allocated to applicants that were successful under the open call process and these financial providers have entered into a contractual relationship with SBCI in relation to their allocation under the scheme.
The scheme is established to operate over a three-year window from time of allocation. The legal agreement with each approved lender has a portfolio trigger percentage, increasing over time, which specifies the expected scheme deployment rate. In the event that it is considered that a lender will not deploy their scheme allocation at the expected deployment rate then there is an option to reallocate this capacity from one lender to others. However, this trigger point has not yet been reached for any lender. The deployment rate of the lenders' scheme allocation is monitored on a quarterly basis, and reallocation of existing capacity will be undertaken if the trigger point for any lender is reached.
