Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The SBCI's purpose is to facilitate access to more flexible, appropriately priced finance with better terms to SMEs as well as promoting the economic development of rural and regional SMEs. It does this by delivering effective financial support to Irish SMEs and addressing failures in the Irish credit market while also encouraging competition and innovation.

It began lending in March 2015. To the end of June 2017, €855 million of SBCI funding has been provided to 21,132 Irish SMEs, directly and indirectly supporting 106,728 jobs. This represents an increase of 57% in SBCI lending since the end of December 2016. The interest rate on SBCI loans is 1.15% lower than the average market interest rate on loans to SMEs and 85% of SBCI loans were to SMEs based outside of Dublin.

The SBCI has €1 billion of funding available from the German bank KfW, the European Investment Bank, EIB, the National Treasury Management Agency, NTMA, and the Council of Europe Development Bank, as well as a loan facility of €215 million available from the Ireland Strategic Investment Fund, ISIF. To date, €881 million of that funding has been committed to the SBCI's seven on-lenders, of which three are banks and four are non-bank finance providers. As the Deputy is aware, the SBCI does not directly lend to SMEs and other organisations but does so via intermediaries.

The lending is largely driven by market demands as well as needs that are not fully met by the private sector. My Department's biannual SME credit demand survey indicates that demand for credit from SMEs has been decreasing and that only 20% of SMEs having sought bank finance in the past six months.

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