John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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207. To ask the Minister for Finance if there will be limits on the size of loans given by the Strategic Banking Corporation of Ireland; and if he will make a statement on the matter. [37097/14]

Michael Noonan (Limerick City, Fine Gael)
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The Strategic Banking Corporation of Ireland (SBCI) has been established as a means of ensuring that SMEs in Ireland are provided with sufficient finance for growth.

In conducting its operations, the SBCI must adhere to EU State aid requirements. My officials have met with Commission State aid officials to ensure that the activities of the SBCI conform with the relevant State aid provisions of the EU Treaty. The initial operations of the SBCI can and will commence without the need for formal State aid approval or notification as the Commission is satisfied that the design of the initial product offerings being considered by the SBCI do not necessitate formal Commission assessment and approval as they will be covered by the Commission's "de minimis" State aid regulation. Given that this regulation allows for a cumulative benefit to SMEs of €200,000 over a three year period, the low interest rate applying to the SBCI funding will mean that loans of between €3 million and €4 million can be availed of in a given three year period under the "de minimis" regime. Central Bank of Ireland research indicates that 90% of outstanding loans to SMEs in Ireland are for amounts of less than €100,000. This same research also highlights that the original loan amounts drawndown by the SME's closely mirrors the profile of outstanding amounts, with again the vast majority of loans being for sums under €100,000. Consequently, the SBCI is satisfied that the "de minimis" regime will allow sufficient flexibility to cater for the financing application requirements of the vast majority of SMEs.

Beyond that, other State aid regulations such as the General Block Exemption Regulations (GBER) offer further flexibility for product design and the SBCI will, of course, seek formal State aid approval for bespoke SME financing schemes should that prove necessary.