With three new on-lenders added in 2016, First Citizen Agri Finance, Bibby Financial Services Ireland and Fexco Asset Finance, the SBCI is now partnered with eight on-lenders, bringing the total committed funding to €906 million at the end of 2016. To date our on-lending partners have drawn €655 million of funding with €544 million of these funds deployed across 12,593 loans to SMEs, supporting 67,150 jobs. This represents significant progress from end-2015 when €172 million of SBCI supported loans had been deployed across 4,619 SMEs, supporting 17,000 jobs.

The average size of loans supported by the SBCI is €43,000, with individual loans ranging in size from €1,500 to €5 million. 84% of SBCI supported loans were used for investment in business, with 11% used for working capital and 5% used to refinance facilities from banks exiting the Irish market.

We have been successful in achieving a portfolio of on-lenders that is well balanced in terms of where our borrowers are located and, also in terms of the sectors in which they operate. In short, we are supporting lending to SMEs in every part of Ireland and in a range of sectors – agriculture, wholesale/retail, accommodation and food, administration and support, manufacturing, transport, construction and more. Through these partners, the SBCI has been able to support the provision of term loans, asset leasing, agricultural leasing, contract hire for vehicles and invoice finance – all at lower rates or more flexible terms than were previously available in the market.

Last year represented a significant milestone for the SBCI as our first risk-sharing product, the Agriculture Cashflow Support Loan Scheme, was announced with a launch date in January 2017. The €150 million scheme aims to support farmers experiencing short-term financial pressure due to price and income volatility. It will provide an opportunity for farmers to borrow up to €150,000 at a special rate of 2.95% over periods of up to 6 years to address the difficult market conditions they have faced recently. These loans are available through Allied Irish Banks, Bank of Ireland and Ulster Bank. The success of this scheme will be crucial to allow the SBCI to develop new ways for SMEs to get easier access to finance.

In a related initiative, the SBCI was appointed as the operator and manager of the Credit Guarantee Scheme (CGS) provided by the Minister for Jobs, Enterprise and Innovation in October 2016. As operator and manager of the CGS, the SBCI will be the primary conduit for guarantee products in the State. This initiative, alongside the Agriculture Cashflow Support Loan Scheme, will enable the SBCI to provide a central source of expertise in this area. A new version of the CGS (CGS 2017) is expected to be deployed in the coming months.

One of the biggest challenges we have faced has been generating awareness among SMEs of the benefits SBCI supported finance can bring to them. The SBCI continued to engage in an intensive SME marketing and awareness campaign in 2016 based around a media campaign across radio, social media, and digital channels. SBCI staff attended more than 40 SME events during 2016 including local networking and brand-building events in every region in Ireland. Surveys show that our efforts have been successful in growing brand awareness but we are keen to keep building awareness among SMEs of the SBCI’s role and what it can offer.

The SBCI made an operating loss of €1.647 million in 2016 due to the lag in the generation of income as our on-lender partners come on board and draw down funds. Longer term, our financial goal is to cover our costs and otherwise to convert our financial advantage into reduced borrowing rates for SMEs rather than to accumulate profits. The SBCI was capitalised by the Minister for Finance at incorporation to the value of €10 million. To meet the SBCI’s expected further capital requirement to support a number of other projects currently in development, the Minister subscribed for additional shares to the value of €25 million in February 2017.

In 2017, the SBCI will continue to expand its offering and has an active pipeline of potential on-lenders at various stages of development. As mentioned by the Chairperson in his statement, the SBCI will continue to seek to source other European supports and funding as required. It will also be a year in which we will continue to build out our risk sharing infrastructure.

Central to our success to date has been the hard work of the SBCI team and the support we have received from the NTMA. The team’s experience and hard work was fundamental in the SBCI achieving the progress made last year. I would like to thank our Chairperson and the Board for their support and commitment they have given to us and look forward to working with them to build on the substantial progress made so far in 2017.

Nick Ashmore
Chief Executive Officer