This morning (14-July-2015) in Dublin Minister Harris welcomed President Gauck of Germany to a roundtable discussion with senior officials and representatives of Irish State Agencies. An objective of discussions was to update President Gauck on progress to date on the operation of the Strategic Banking Corporation of Ireland – established with the support of the German Development Bank (KfW) and the European Investment Bank. Speaking at the event Minister Harris noted,
“The SBCI is critical to the Government aim to ensure that Irish SMEs have access to enhanced financial products as available to SMEs across Europe. Its establishment is a major milestone in our continued economic recovery. In this respect it is important to acknowledge the solidarity shown by our German and EIB partners in the form of funding and technical expertise.”
The SBCI launched its first product programme last February with lending commenced on the 9th March 2015 through both Bank of Ireland and Allied Irish Bank Plc. An initial sum of €400m has been allocated between both banks for SME lending.
In view of the Government objective to expand the range and profile of SME finance providers in Ireland, the SBCI will work with existing and new providers to develop specific funding products, and support new entrants to the SME lending market by allocating the remaining €400m to a number of new and non-traditional SME finance providers.
The SBCI will provide a public update later this month on the number and volume of SBCI-supported loans to SMEs for its initial lending period of 9 March 2015 to 30 June 2015.
Further information and updates are available at www.sbci.gov.ie
ENDS
14th July 2015
Media Contact: Richard Troy, 087-0641625
Notes to editors
SMEs which are eligible for SBCI loans are defined as “independent enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding €50m and/or an annual balance sheet total not exceeding €43m.
Together with the supports already being provided by the Credit Guarantee Scheme, Microfinance Ireland and the Credit Review Office, the SBCI’s products will be easy to access through the online tool for SMEs.
Background to the SBCI
- Unlike many European countries, Ireland did not have a state development bank to sustain funding to businesses throughout the financial crisis.
- During Ireland’s exit from the EU/IMF programme in late 2013, the Taoiseach and German Chancellor Ms Angela Merkel agreed that the German promotional bank, KfW would help finance the Irish SME sector.
- It was this European agreement that led to the creation of the Strategic Banking Corporation of Ireland (SBCI), ensuring that in future, Irish businesses have access to long-term, patient funding.
- In January 2015, the Department of Finance initiated a campaign, which sought applicants for appointment to the Board of the SBCI. This was one of the first campaigns to be progressed through the new State Boards appointment process using the Public Appointments Service website, Stateboards.ie. In the case of the SBCI, the new Board appointments ensured that the Board represents the interests of those operating in the SME sector.
- The Department of Finance and the National Treasury Management Agency worked throughout 2014 to create the necessary mechanisms to establish the SBCI.
- Building on the initial funding offer from Germany’s KfW, the project team added funding from the European Investment Bank (EIB) and the Ireland Strategic Investment Fund, a 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 formally launched in October 2014 by the Minister for Finance and Minister for Public Expenditure and Reform, together with the German Minister for Finance, Dr Wolfgang Schäuble , President Werner Hoyer of the EIB and Dr Ulrich Schröder of the KfW.
- Lending began on the 9 March 2015. The SBCI will provide a public update during July 2015 on its activities between the commencement of lending and the end of June 2015.
