Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank Deputy Kyne for this very important question. The Strategic Banking Corporation of Ireland, SBCI, was formed in late 2014 and began lending in March of this year. The SBCI makes its funds available to SMEs through lending partners known as on-lenders, the first of which are Bank of Ireland and AIB. The SBCI has made considerable progress in providing finance to Irish SMEs. To the end of September of this year, the SBCI has lent €110 million to over 3,200 SMEs across Ireland and to all sectors of the economy.

It may interest the Deputy to know that the SBCI has developed a tailored agriculture investment loan. This product is available for investment by agricultural SMEs involved in primary agricultural production, the processing of agricultural products or the marketing of agricultural products. The loan can be for amounts of up to €5 million with a loan maturity of between two and ten years. To date, approximately one third of the SBCI's total lending has been to SMEs in the agri sector who have taken out agriculture investment loans. I understand that the SBCI intends to publish further detailed lending results for 2015 in early 2016.

The Government's aim for the SBCI is to increase the provision of finance to Irish SMEs and to provide such finance at a lower cost and on more flexible terms than were available in recent times on the market. Additionally, it is intended that the SBCI will foster greater competition amongst finance providers in the market. The SBCI is achieving this by working with existing and new providers to develop enhanced products and by supporting new entrants to the SME lending market.

In this regard, the SBCI has recently announced new on-lending agreements with two non-bank lenders, Finance Ireland and Merrion Fleet. This is a key step in creating greater competition for SME lending in the Irish market and providing funding for a broader range of products including asset finance, leasing and contract hire.

Additional information not given on the floor of the House

The SBCI is in advanced discussions with a number of other bank and non-bank lenders and it is anticipated that further announcements of new on-lending agreements will be made in the coming months. The SBCI is committed to leveraging existing and new relationships with on-lending partners to support SME growth and investment through the provision of lower cost and longer term funding. To date, the SBCI has committed a total of €475 million for on-lending to Irish SMEs, out of its current funding capacity of €800 million. The SBCI has made significant progress over its first seven months of operations, both in terms of providing funding to SMEs and building a strong infrastructure through which it will continue to provide long term support to SMEs.

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