Mr. Ian Black:

I thank the Chairman and members for the invitation to appear before the committee today. I am joined by Ms Suzanne Sweeney, head of lending, and Ray Mangan, head of risk, finance and operations.  SBCI is Ireland's promotional financial institution for SMEs and has been in business for a little over six years. In that time, we have provided more than €2.3 billion in low-cost, flexible funding and more than 35,000 individual facilities to Irish SMEs and farmers. More than €1.9 billion of SBCI-supported facilities have been drawn down by SMEs to date. We serve SMEs of all sizes and our individual loan facilities have ranged in size from €5,000 to €4 million. The launch of the Government's Covid-19 credit guarantee scheme has provided an additional €2 billion in guarantee capacity to support the SME finance market. To date, the credit guarantee scheme has provided more than 4,000 SMEs with funding of €264 million.

At the outset, I would like to ask members of the committee who are aware of any constituent who owns or works for an SME and is looking for funding, to please refer them to us. We will point them in the right direction as to the facilities that are most appropriate for them and where they can access those facilities through our on-lending partners. While SME awareness of the supports we offer through our lending partners is relatively high, we would welcome members' help in bringing our services to the attention of their constituents  wherever possible.

To date, we have teamed up with 33 on-lenders, comprising the five retail banks operating in Ireland, nine non-bank institutions and 19 credit unions. Those credit unions are located throughout the country.  In our early days, we sourced low-cost funding which we lent to partners to allow them to lend to their SME customers at a discount on the prevailing market rate. This gave SMEs access to lower-cost funding that provided both cost savings and cash flow benefits to them.  In recent years, our role has evolved to reflect changing market conditions. We began offering risk-sharing schemes through partner on-lenders and we now support SME borrowers through five separate risk-sharing schemes tailored to meet specific challenges facing SMEs. Risk sharing allows lending partners to provide loans without taking all of the credit risk, which facilitates easier access for SMEs to these loans through more attractive security requirements, lending criteria or loan pricing.

SBCI's countercyclical model has allowed it to respond quickly to emerging challenges, including the Covid-19 pandemic and Brexit. The value of SBCI as a ready-made conduit for State support was clearly evidenced by the delivery of the Covid-19 working capital scheme and the Covid-19 credit guarantee scheme as timely responses to the crisis.  The provision of risk-sharing schemes was made possible by SBCI acting as Ireland's conduit for Government funding and European SME support schemes, initiated by institutions including the European Investment Bank and the European Investment Fund. These schemes aim to make it easier for SMEs to access finance for working capital and investment purposes.  We also operate the Covid-19 credit guarantee scheme, launched last year, on behalf of the Department of Enterprise, Trade and Employment. We have operated a similar credit guarantee scheme to enhance SME access to finance since 2016.

I would like to brief the committee on the scheduled strategic review undertaken by  SBCI, which concluded last year and resulted in the development of a new strategy for the period 2020 to 2025.  This review was informed by an external analysis undertaken by EY and was conducted in accordance with the requirement in the legislation establishing SBCI for a periodic review to ensure that it continues to meet its objectives.  The key elements of SBCI's strategy for the period 2020 to 2025 include our plans to launch a range of new SME funding options during the period, to be Ireland's conduit for major European SME funding programmes, to explore the potential for supporting new SME energy retrofit schemes, and to explore the potential for supporting new loans to higher-risk, higher-growth SMEs, together with new forms of finance such as mezzanine and junior debt.

I would like to conclude my opening remarks by acknowledging the contribution to SBCI's development over the past six years of Nick Ashmore, who served as CEO from its inception until last month. I was appointed interim CEO by the SBCI board pending the recruitment of a permanent CEO. I will step down when that appointment is made and return to my role as chief financial and operating officer at the National Treasury Management Agency, NTMA. As members are aware, the NTMA provides staffing and infrastructure supports for SBCI. While SBCI is a separate entity with its own board, all SBCI staff are employees of the NTMA.  I hope that my opening remarks and the slide presentation we circulated separately have given the committee a better understanding of the work of SBCI. Ms Sweeney, Mr. Mangan and I will do our best to answer any questions members may have.