John O'Mahony (Mayo, Fine Gael)
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70. To ask the Minister for Finance the progress on the establishment of the Strategic Banking Corporation of Ireland; when lending to small businesses will commence; and if he will make a statement on the matter. [6440/15]

Michael Noonan (Limerick City, Fine Gael)
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The Strategic Banking Corporation of Ireland (SBCI) is built on the foundation stone that was laid by the Taoiseach and Chancellor Merkel when they agreed that the German promotional bank Kreditanstalt für Wiederaufbau (KfW) would help finance the Irish SME sector when Ireland was exiting the EU/IMF programme in late 2013.

I asked my Department and the National Treasury Management Agency to create the necessary mechanisms to construct the SBCI.  Building on the initial funding offer from the KfW, the Government added funding from the European Investment Bank (EIB) and the Ireland Strategic Investment Fund (the new fund to which the assets of the National Pensions Reserve Fund were transferred). The Government approved this approach and legislation enabling the establishment of the SBCI was passed by the Oireachtas in July 2014.

The SBCI was incorporated in September 2014 and since then the SBCI has made considerable progress in building relations with lending partners and in constructing the complex operational capability required to bring products to market. These include establishing operational capability with funders and lending partners, building internal systems and business processes, and establishing a team to safely and effectively manage the funding provided on behalf of the State. In that regard, it is worth pointing out that both the CEO of KfW and the President of the European Investment Bank have complimented the Government's work on the establishment of the SBCI noting that the project from concept to establishment was achieved much more promptly than similar initiatives in other countries. 

The SBCI drew down €200m of its funding from the European Investment Bank during December 2014 so that funds could be borrowed by its lending partners to be distributed to SMEs.  

The SBCI is preparing for a nationwide launch of its products shortly with lending due to commence in Q1. The Government's aim for the SBCI is to enhance the range and profile of SME finance providers in Ireland. The SBCI will achieve this by working with existing and new providers to develop specific funding products and by supporting new entrants to the SME lending market.