Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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677. To ask the Minister for Agriculture, Food and the Marine if he will address matters with regard to the low cost loans facilitated through €150 million in EU finance under the auspices of the Strategic Banking Corporation of Ireland and being underwritten and administered by a bank (details supplied). [11349/17]

Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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694. To ask the Minister for Agriculture, Food and the Marine if he will provide an update on the €150 million in EU funds being made available as low cost finance to farmers through the Strategic Banking Corporation of Ireland; the application process and criteria; the number of applications that have been received to date and the value; the number of applicants that have been approved and the value; the number of applications that have been declined and the value; and if he will make a statement on the matter. [11545/17]

Michael Creed (Cork North West, Fine Gael)
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I propose to take Questions Nos. 677 and 694 together.

One of my priorities has been to address the impact of the change in the sterling exchange rate and lower commodity prices in some agriculture sectors, which have caused cash flow difficulties for farmers. Therefore I was pleased to facilitate the “Agriculture Cashflow Support Loan Scheme”, which was developed by my Department in co-operation with the Strategic Banking Corporation of Ireland (SBCI) and makes €150 million available to farmers throughout Ireland at interest rates of 2.95%. Distributed and administered through AIB, Bank of Ireland and Ulster Bank, the Scheme provides farmers with a low cost, flexible source of working capital and will allow them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

The participating banks will report to the SBCI on a regular basis although no returns have been made as yet. Very strong interest has been reported and it is anticipated that official figures will be available shortly.

My Department is contributing €25million in total, including €11 million from the EU’s ‘exceptional adjustment aid for milk and other livestock farmers’ and €14 million in national funding. SBCI uses the €25 million to leverage the fund, i.e. the other €125 million is being provided by the ‘finance providers’ (AIB, Bank of Ireland and Ulster Bank). SBCI are not providing funding but, along with the European Investment Fund’s ‘COSME’ (the EU programme for the Competitiveness of Enterprises and SMEs), is providing the guarantee required to underpin the loan’s flexibility and lower the cost of the loans.

The public money is used primarily for two purposes, an interest rate subsidy and a guarantee. Approximately an equal amount of money goes towards both. The interest rate subsidy is paid to the finance providers and the guarantee amount is retained by the SBCI to be used in the event of defaults. Defaults in the agriculture sector are traditionally low and any unused guarantee funds will be repaid to the Department.