Mr. Nick Ashmore:

Coming to the first question around the term of the loan and how it affects the subsidy, to be clear, the €25 million funding provided resides with the Strategic Banking Corporation of Ireland, SBCI, and is only paid out to the banks as it is required. They have to prove that they have loans in place that we are covering to justify the receipt of the subsidy. It is scaled to make sure that it reflects the actual loan portfolio and there is no risk of any further funds going to the banks than are absolutely necessary. It is the same if they claim under the guarantee. They have to try first to restructure the loans but we will they pay out for loans that go into default.

There was no predetermined split whereby we were telling them they had to do so many loans of this or that duration. It was really demand dependent, matching the loan term to the use of the funding. The larger loans have a longer duration and equate often to the refinancing of capital expenditure that the farmers have already made. They have used their own cash, their own working capital to buy a tractor or invest in a new facility, and those loans are refinanced out at the cheaper rate to restore their working capital position and inject liquidity back into the business. They tend to be larger loans. The shorter-term loans tend to be refinancing working capital, merchant credit, other creditors and that type of thing, and therefore there is a shorter duration applied, in keeping with the normalised lending approach. Those loans are delivered by the banks, subject to their normal lending criteria and procedures.

What we have achieved with the guarantee is to remove the need for security. While we have added a little bit of bureaucracy with the paperwork on those loans, to meet the information requirements of the Department and the Commission, the fact that there is no need then to append the loans to security over land or other assets is actually a major saving in terms of paperwork and time.