Supporting 23,000 Irish SMEs with €925m in new lending

 

 

2017 was a transformative year for the Strategic Banking Corporation of Ireland (SBCI).

We almost doubled the number of SMEs that are benefiting from our low-cost, flexible funding offerings – from 12,500 at the start of the year to 23,000 now.

We have now supported over €925m in SME lending, up from €544m as we entered 2017.

Growing the number and value of loans is important. But what is more important to me is that 2017 was also the year when the SBCI found new and better ways to support more SMEs.

In our first two years in business, our role was to be an effective, targeted conduit for low-cost funds – sourcing funds from partners such as KfW, the German promotional lender; the European Investment Bank; and the Ireland Strategic Investment Fund and getting these funds to SMEs throughout Ireland through 3 banks and 4 non-bank lenders. We were – and continue to be – successful in this role.

But 2017 saw us become much more than that.

We were proud to deliver, in conjunction with the Department of Agriculture, Fisheries and the Marine, our first risk-sharing product during the year, with the launch of the €150m Agri Cashflow Support Scheme.

This meant that, for the first time, the SBCI itself was sharing the lending risk with other lenders. It was also the first time that the European Commission’s COSME counter guarantee programme had been used in Ireland and the first time in Europe that it has been used for primary agriculture.

This has resulted in the SBCI being able to help more businesses because SBCI risk-sharing means their bank is no longer taking all the risk on the loan.

This makes it easier for these businesses to meet their bank’s risk appetite and to borrow the funds they need to grow. We are delighted that we can play such a constructive role in this space.

The Agri Cashflow Support Scheme was a huge success. It was fully subscribed within weeks, with the result that all the available funds were committed quickly.

For the SBCI, this experience demonstrated in practice what we knew to be true; that there are thousands of high-quality SMEs, which are backed by ambitious, entrepreneurial owners and managers, and which can prosper if they get the right kind of support.

Our aim is to repeat the success of the Agri Cashflow Support Scheme in other areas, wherever possible.

2017 was also notable for the announcement in the Budget of the €300m Brexit Loan Scheme, which will be available early in 2018.

This will be the SBCI’s second major risk-sharing programme. We are delighted to be working with the Department of Finance, the Department of Business Enterprise and Innovation and the Department of Agriculture, Food and the Marine to implement this scheme. We are also excited to be working with the European Investment Fund, which is expected to support the SBCI in this scheme.

It is undoubtedly a challenging time for Ireland’s SMEs as we enter 2018 and move closer to the point where Brexit becomes a reality.

But we are confident that, powered by the strong performance of the domestic economy and the innate skills and know-how that Irish SMEs have nurtured and developed, our SME sector can meet these challenges.

Whatever happens, the SBCI will work hard to identify and implement solutions that will support our SMEs and equip them with a lending environment that is competitive, innovative and SME-friendly.

On behalf of the SBCI I wish you, your families and your work colleagues a Happy Christmas. We look forward to working with you in 2018 and beyond.

Nick Ashmore, CEO