Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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72. To ask the Minister for Finance the reason the State has secondary security over moneys loaned by the Strategic Banking Corporation of Ireland to a company (details supplied) while the minority lender has a stronger fixed and floating charge; and if he will make a statement on the matter. [52387/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The role of the Strategic Banking Corporation of Ireland, the SBCI, is to provide effective financial supports to Irish SMEs and encourage competition and innovation in the SME finance market while also ensuring the efficient and effective use of available EU resources. The SBCI, as the Deputy is aware, does not provide financing directly to small businesses using an on-lending model. The SBCI operates through partner finance providers, known as on-lenders. The SBCI works with both bank and non-bank finance providers.

I am advised by the SBCI that it enters into facilities with its on-lenders on a commercial and market neutral basis. The SBCI will consider applications from all finance providers to be an SBCI on-lender on the basis of general criteria. The SBCI consequently avoids commenting on specific on-lenders and cannot reveal commercially sensitive information regarding their individual facilities. The same approach applies to prospective on-lenders. However, each on-lender is different in terms of size structure, financial strength, parental or group support etc.

The Deputy may rest assured that SBCI carries out due diligence and a thorough assessment of each prospective on-lender to ensure that the appropriate legal and corporate structure is put in place to ensure that the taxpayers’ position is protected. I am informed this can include, where necessary, coming to arrangements with that on-lender’s other creditors in relation to security over assets.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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73. To ask the Minister for Finance the reason €675 million of Strategic Banking Corporation of Ireland funding has as of December 2016 gone to the pillar banks (details supplied) and only 11% of its drawn down lending has gone to working capital for SMEs in view of the fact that it was established to lend to SMEs; and if he will make a statement on the matter. [52388/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Strategic Banking Corporation of Ireland, the SBCI, is Ireland’s national promotional institution. Its strategic mission is to increase the availability of appropriately priced, flexible funding to viable Irish SMEs by delivering effective financial supports to Irish SMEs that address failures in the Irish credit market, while encouraging competition and innovation and ensuring the efficient use of available EU resources. The SBCI does not provide funding directly to small businesses, rather it operates through partner finance providers, known as on-lenders. The SBCI currently has three bank and three non-bank on-lenders.

The SBCI initially provided funding to pillar banks in order to take advantage of their broad existing customer bases and to enable as wide a distribution as possible of lower costs loans to SMEs.

Since December 2016 the SBCI has also provided to date over €250 million of funding to non-bank finance providers to help increase competition in the SME finance market in Ireland. The SBCI’s funding is deployed across a variety of products, including working capital as well as asset financing, leasing and invoice discounting, to give a range of loan options for SMEs. Since it began its activities in March 2015, to the end of March 2018, a total of €952 million SBCI supported loans have been drawn down by eligible SMEs, 25% of which were for working capital purposes.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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74. To ask the Minister for Finance his views on whether a series of financial matters concerning a person (details supplied) is appropriate or a potential abuse; and if he will make a statement on the matter. [52389/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Strategic Banking Corporation of Ireland, the SBCI, is a Designated Activity Cody (DAC) under the Companies Act 2014 and has an independent Board of Directors. 

In relation to the first part of the Deputy’s question regarding members of the SBCI Board, the SBCI is a public body and is subject to the Revised Code of Practice for the Governance of State Bodies 2016, which contains a number of provisions that boards of public bodies must follow to address actual and potential conflicts of interest of their Board members. The SBCI has informed me that it is satisfied it has complied with those requirements.

In relation to the second part of the Deputy’s question, I am advised that the SBCI enters into facilities with its on-lenders on a commercial and market neutral basis. The SBCI will consider applications to be an on-lender from all finance providers. Consequently, the SBCI avoids commenting on specific on-lenders and cannot reveal commercially sensitive information regarding individual facilities.

However, I am informed that the SBCI engages in regular monitoring to ensure that new loans, equivalent to the amount it has provided to each on lender, is deployed to eligible SMEs. Each on-lender is different in terms of size structure, financial strength, parental or group support. The Deputy may rest assured that the SBCI thoroughly assesses each on-lender and carries out appropriate due diligence to ensure that the appropriate legal and corporate structure is put in place so that the taxpayers’ position is fully protected.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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75. To ask the Minister for Finance further to a freedom of information request, the reason onlenders of SBCI moneys are not required to obtain a copy of current tax clearance certificates from their respective customers leaving the State exposed to tax losses; and if he will make a statement on the matter. [52390/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The purpose of the SBCI is to deliver effective financial supports to Irish SMEs. The SBCI does not provide funding directly to small businesses, rather it operates an on-lending model which involves working through partner finance providers, known as on-lenders. The SBCI currently has three bank and three non-bank on-lending partners.

I take it that the Deputy is asking whether the SBCI makes it a requirement for its on-lenders to seek a tax clearance certificate from the SME borrowers that receive SBCI loans. I have been advised by the SBCI that seeking tax clearance certificates from borrowers is a matter for the on-lenders. They provide lending into SMEs in accordance with their normal credit policies and procedures. 

Due to its on-lending model, the SBCI’s direct relationship is with its on-lending partners. The SBCI enters into facility agreements with its on-lenders and these agreements set out the obligations in relation to the funding provided by the SBCI, including terms and conditions to protect taxpayers from potential losses.