Joan Burton (Dublin West, Labour)
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22. To ask the Minister for Finance the amount of funding being provided by the Strategic Banking Corporation of Ireland; his plans to review the aims of the Strategic Banking Corporation of Ireland; if he has satisfied himself that the lending policies of this Government-funded institution are appropriate; and if he will make a statement on the matter. [50720/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The strategic mission of the SBCI is to deliver effective financial supports to Irish SMEs that address failures in the Irish credit market, while also encouraging competition and innovation. The SBCI achieves this aim through the provision of low cost liquidity and risk sharing activities.

The SBCI began lending in March 2015. To the end of June 2017, €855 million of SBCI funding has been provided to 21,132 Irish SMEs, supporting 106,728 jobs. It is encouraging to note that 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 are to SMES based outside of Dublin. As the Deputy will appreciate, the SBCI’s lending is driven by market demands as well as needs that are not fully met by the private sector.

The SBCI has €1 billion of funding available from KfW, the EIB, the NTMA and the Council of Europe Development Bank, as well as a loan facility of €215 million available from ISIF. To date, €881 million of this funding has been committed to the SBCI’s seven on-lenders.

The SBCI is focusing on developing a diverse range of on-lenders, currently four of its on-lenders are non-bank finance providers. The SBCI has an independent board and risk management committee responsible for making the decision to enter in to an on-lending agreement. The SBCI's on-lender criteria are designed to mitigate risks to Irish taxpayers and European funding and to SME borrowers. They aim to ensure that all lending partners have the necessary financial strength and capability to provide the required level of service to SMEs alongside sufficient protections for the taxpayer. This requires both a robust due diligence process and a careful structuring of its lending facilities.

The SBCI is also working to develop more innovative products, such as the Agricultural Cashflow Support Loan Scheme and the Brexit Loan Scheme. The Deputy can rest assured that the SBCI is supporting the provision of appropriately priced, flexible funding to SMEs and improving finance providers’ willingness to lend to SMEs.