Catherine Murphy (Kildare North, Social Democrats)
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172. To ask the Minister for Finance the historical amounts allocated to banks (details supplied) to provide funding to small and medium enterprises; if the Strategic Banking Corporation of Ireland, SBCI, monitors the amounts drawn down from these banks via that stream of funding; if his attention has been drawn to a perceived conflict of interest in the context that the banks use audit and accounting firms that also sit on the selection committee of the SBCI; and if he will make a statement on the matter. [46718/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Strategic Banking Corporation of Ireland (SBCI) is Ireland’s national promotional institution. The SBCI’s goal is to increase the availability of appropriately priced, flexible funding to viable Irish SMEs. The strategic mission of the Strategic Banking Corporation of Ireland (SBCI) is to deliver effective financial supports to Irish SMEs that address failures in the Irish credit market, while driving competition and innovation and ensuring the efficient use of available EU resources.

The SBCI uses an on-lending model. This means it does not lend directly to SMEs. Rather, the SBCI provides funds through partner finance providers, known as on-lenders. To date the SBCI has provided the following funding to bank on-lenders referred to by the Deputy. These funds have been given to provide lower cost financing to SMEs, all of which has been fully deployed by those banks to over 14,000 SMEs.

The SBCI has also provided funding of over €230 million to its non-bank lending partners.

The SBCI has an independent board of directors and there is a comprehensive governance and oversight structure in place as part of the SBCI’s corporate structure. The SBCI also complies with the Revised 2016 Code of Practice for the Governance of State Bodies. While the SBCI board is accountable to the Minister for Finance, it is independent, and the Strategic Banking Corporation of Ireland Act 2014 specifically prohibits me as, Minister for Finance, from acting as a shadow director. Therefore, I am not in a position to get involved in or comment on specific decisions made by the selection committee of the SBCI as part of the process of considering prospective on-lenders.

I am advised by the SBCI that it undertakes regular and robust reviews of all its current on-lending partners to ensure that SBCI funding is being deployed to eligible SMEs and that those SMEs receive the full benefit of the lower cost funding. I understand that monitoring is done through a combination of regular meetings between the SBCI and each on-lender, detailed reporting of each loan advanced by the on-lender to the SME, which is updated quarterly, and independent audits.

None of the banks’ auditing and accounting firms sit on the selection committee for on-lenders of the SBCI. Instead, I am informed that the SBCI’s on-lending partners are selected by the SBCI’s board of directors, after a thorough due diligence process.

The Deputy may rest assured that the SBCI is keen to work with any lender, large or small, that can demonstrate it can deliver the required funding advantage to eligible SMEs on terms that protect taxpayer money. The SBCI’s strategy in relation to on-lenders is based on developing a strong pipeline of potential on-lenders to achieve diversity in the market and encourage competition.