Gabrielle McFadden (Longford-Westmeath, Fine Gael)
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18. To ask the Minister for Finance when and the way small and medium enterprises may access low interest loans from the Strategic Banking Corporation of Ireland. [44635/14]

Michael Noonan (Limerick City, Fine Gael)
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The SBCI has been established as a means of ensuring that SMEs are provided with sufficient finance for growth and also ensuring that credit provided to SMEs is tailored to meet their business needs.  While the product design process is not yet completed, it is anticipated that the SBCI will provide loans that are currently not typically offered in Ireland such as loans of longer duration and loans that have built in payment holidays that encourage and enable growth of our SMEs. The SBCI will have a lower cost of funding and this cost benefit must be passed onto SMEs.

As the Deputy may be aware, loan agreements with the international funders, KfW and the European Investment Bank, have recently been signed.

In order to have the SBCI operational as quickly as possible, it will operate in a manner similar to how KfW operates in Germany, as a wholesale lender, that lends to partner lenders who will then lend directly to SMEs.  SMEs will use the on-lending institutions' resources to apply for an SBCI funded product.  The on-lending model is designed to ensure that as much of the benefit of the SBCI's low funding cost is passed onto SMEs.  This also means avoiding as much operational overhead as possible.

The SBCI is working with its first lending partners (on-lenders), AIB, Bank of Ireland and Bibby Financial Services to provide initial funding to the SME sector by the end of 2014.  A full roll-out will occur during January 2015 with traditional bank lenders and importantly, with new credit providers from beyond the traditional bank sector. All of this will allow for the distribution of SBCI funding to the SME sector in Ireland on a prudent basis.