Lines of Business
Having progressed its phased market entry approach, the SBCI has established three lines of business:
1) Lending
The current lending business model of the SBCI is to serve as a wholesale on-lending financial institution. It provides low cost, long-term wholesale finance to suitable on-lenders with the benefit of the lower interest cost being passed to SME borrowers. The SBCI’s strategy is based on developing a strong pipeline of potential on-lenders to achieve diversity in the market and drive competition while being cognisant of not distorting the market in any lending sector.
2) Risk Sharing
The risk-sharing business model is to provide partial credit guarantees to finance providers to facilitate the advancement of credit to SMEs, including where access to credit is constrained by specific sectorial or economic cycle market failures. The SBCI avails of and leverages risk capacity from State and European supports to design financial instruments which make efficient use of its capital and enhance SME access to finance. The SBCI Agriculture Cashflow Support Loan Scheme which was launched in Q1 2017 exemplifies this approach.
3) Service Provision
Service Provision acts as a supplementary line of business to the two primary lines of business, Lending and Risk-Sharing. In October 2016, the SBCI was appointed as operator and manager of the Credit Guarantee Scheme by the Minister for Jobs, Enterprise and Innovation. This is important in establishing the SBCI as the primary conduit for risk sharing products in Ireland. The SBCI will provide such services where they strategically enhance or complement the primary lines of business.