Unlike many European countries, Ireland did not have a State promotional bank or credit institution 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 agreed that the German promotional bank, Kreditanstalt für Wiederaufbau (KfW), would initially help finance the Irish SME sector. This led to the creation of the Strategic Banking Corporation of Ireland (SBCI) in September 2014 to ensure that, in future, Irish businesses have access to stable, low cost, long-term funding. Building on the initial funding offer from KfW, funding was also sourced from the European Investment Bank (EIB) and the Ireland Strategic Investment Fund (ISIF).

In its initial operations the SBCI is focused on providing SMEs with access to low cost longterm finance from multilateral finance providers and State resources, and channelling this finance in a manner that supports productive investment, encourages growth and facilitates employment in the SME sector. The SBCI also seeks to drive competition in the market for SME lending. To deliver these objectives, the SBCI is acting through banks and lending institutions that, in turn, lend to SMEs and, in doing so, pass on the benefit of the lower cost of funds on offer. This operating model also promotes competition in the Irish market for SME finance by facilitating the entry and growth of new market participants.

The establishment of the SBCI ensures that Ireland has in place an institution that can serve to facilitate EU financing from multilateral bodies such as the EIB and the European Investment Fund (EIF). Equally, the SBCI is ideally placed to develop positive working relationships with other national development banks.

The SBCI’s strategy is to deliver effective financial supports to Irish SMEs and, in time, other sectors where failures emerge in the Irish credit market, while driving competition and innovation. The SBCI has a vital role to play in restoring an effective and sustainable market for SME financing in Ireland and a wider role in the long term as a conduit for State and European financing supports.