Some €347m in loans was drawn down by more than 8,600 SMEs from the Strategic Banking Corporation of Ireland (SBCI) since it began loaning in March 2015, according to the organisation’s annual report and mid-year review (below), which were published today.
The agency loaned out €147m to 4,600 SMEs between March and December 2015, but the first six months of this year have seen double the amount loaned. SBCI loans are delivered through seven on-lenders: AIB, Bank of Ireland, Finance Ireland, Merrion Fleet Management, Ulster Bank, First Citizen Finance and Bibby Financial Services.
The SBCI was established by the Department of Finance and the National Treasury Management Agency in 2014 to provide low-cost loans to cash-starved SMEs, and was funded by the German promotional bank Kreditanstalt für Wiederaufbau (KfW).
Additional funding was secured from the European Investment Bank (EIB) and the Ireland Strategic Investment Fund, a new fund to which the assets of the National Pensions Reserve Fund were transferred.
Loan Size
The average loan size to SMEs is €40,000 and the largest was €5m. The SBCI said that on average, the discount on its loans versus market rates is 1.5%. The agriculture sector is the most enthusiastic recipient of SBCI loans, accounting for 24% of the money given out.
In Association with
Business working in admin and support claimed nearly 11% of the SBCI kitty so far, while the accommodation and food trade sector drew down 15% of the total.
The geographical spread of loan recipients is fairly equal – Dublin accounted for 15% of loans drawn down, the South West accounted for €18%; the West, 13% and the South East 11%. Midlands-based SMEs were the least well represented, with just 6.5% of the SBCI funds going there.
Earlier this month, the SBCI and Bibby Financial Services Ireland launched a new lower-cost invoice financing fund for Irish SMEs. The initiative sees €45m in funding being made available to Irish businesses, enabling them to access favourable rates for BFSI’s invoice finance facilities. The new on-lender brings SBCI’s total lending capacity to over €800m, meaning there's plenty of funds still available if SMEs want them.
In the 16 months to December 2015, the SBCI’s income from interest on loans and other products came to just under €1.3m. Nick Ashmore (pictured), the agency’s CEO, earned a total of €310,000 during the same period. The SBCI booked a loss of €3.7m during this time.
Commenting on the SBCI’s performance, Nick Ashmore said: “These figures demonstrate the breadth of the SBCI’s impact and the appetite among Irish SMEs for lower-cost funding that is more flexible and SME-orientated.”
He added: “It’s great to be able to report that since the SBCI began lending to SMEs in March 2015, the pace of SBCI loan drawdowns has grown steadily as it has expanded its range of on-lending partners and product types.
“We are grateful for the commitment shown by our on-lenders to deliver these results for SMEs. In parallel we’ve seen a growth in new lending in the SME sector and a drop in interest rates for larger SME loans.
