Strategic Banking Corporation: latest part of a suite to help credit hungry firms

The establishment of the Strategic Banking Corporation of Ireland is the latest measure in an expanding suite aimed at providing credit to small and medium-sized businesses.

The Government says that already €2 billion in non-bank lending has been made available. The Government’s efforts won praise from the OECD but it is unclear how much of the €2 billion has gone to companies to date.

Four schemes account for some €1.6 billion of the total, but the data available only shows where €15.71 million has been spent.

The Microenterprise Loan Fund and the Credit Guarantee Scheme came into operation in October 2012 and report quarterly.

On its launch, Minister for Enterprise Richard Bruton said the microenterprise fund would provide "up to €90 million in lending to 5,500 businesses which otherwise would not get credit".

“[It] will help create over 7,700 jobs over the next 10 years.”

An update at the end of March showed the fund had approved applications worth €3.02 million and that the loans were “supporting a total of 437 full-time equivalent jobs (net)”.

Insufficient collateral The Credit Guarantee Scheme set out to provide up to €450 million over three years to businesses with insufficient collateral or operating in sectors that banks were not familiar with. The fourth report on the scheme, for the period to December 31st last, showed €12.69 million had been sanctioned to 94 applicants in its first 14 months.

Mr Bruton is to seek Government approval for a revision of the legislation underpinning the scheme to “enhance the take-up and impact”.

A spokesman for the Minister said the two schemes were demand led and that providing access to non-bank credit for businesses had been a major Government focus.