Dáil Éireann Debate, Thursday - 28 April 2022
51. Deputy Matt Carthy asked the Minister for Finance if he has considered the creation of new, or repurposing of existing, financial instruments under the Strategic Banking Corporation of Ireland, with regard to the current challenges facing the self-employed and the small and medium enterprise sector. [17910/22]
Amharc ar fhreagraThe 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 has an independent Board and SBCI activities are subject to extensive due diligence processes in advance of any decisions to lend or provide guarantees. The SBCI's schemes and on-lender criteria are designed to mitigate risks to Irish taxpayers, European funding and to SME borrowers.
Since the SBCI commenced operations in March 2015 and to the end of 2021, it has delivered €2.8bn to more than 46,000 SMEs. During 2021, the SBCI delivered €819m to 10,012 SME’s through its risk-sharing and liquidity operations.
Guarantee Schemes are operated by the SBCI on behalf of the Department of Enterprise, Trade and Employment and Department of Agriculture, Food and the Marine. Under such schemes, loan facilities are made available through finance providers utilising their own funds at interest rates below the market rate.
One of the responsibilities of the Minister for Finance is to ensure that those viable businesses who wish to access credit from bank and non-bank sources can do so. This includes monitoring of sectoral demand for credit from SMEs using the SME Credit Demand Survey.
The Department of Enterprise, Trade and Employment and the Department of Agriculture, Food and the Marine also monitor access to finance on an ongoing basis with a view to adapting and repurposing existing loan schemes to target those businesses that most need them.
For example, the Department of Enterprise, Trade and Employment has commissioned a review of the Future Growth Loan Scheme, which is a long term lending scheme introduced to help SMEs access finance for strategic investment purposes. The findings from this work will help in informing future policy considerations in relation to long-term lending.
To conclude I would strongly encourage businesses to avail of existing low-cost lending facilities provided by the SBCI and available through a range of lenders including commercial banks, certain credit unions and non-bank lenders.
