Thursday 29 September 2016

Over 25pc of SBCI loans go to agri sector

Published 21/06/2016 | 02:30

Last year, the SBCI committed €751m to SMEs through five lending partners.
Last year, the SBCI committed €751m to SMEs through five lending partners.

The Government's Strategic Banking Corporation of Ireland (SBCI) is providing over 12pc of all funding supplied to hotels and restaurants in the country, new figures from the agency show.

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The data also shows that 26pc of the lending it provided last year was for the agri sector. Just 3pc was for construction services.

And two-thirds of the €172m in lending it has provided spans five business sectors - hotels and restaurants, agriculture, health, retail, and other business services.

Last year, the SBCI committed €751m to SMEs through five lending partners.

Of that, €400m was committed by AIB, €200m by Bank of Ireland, €75m by Ulster Bank, and €51m by Finance Ireland. Merrion Fleet Management committed €25m.

The SBCI said that 92pc of the loans it has advanced are being used for growth and investment. That compares with 53pc of current SME lending market loans being used for the same purposes.

The SBCI was established in 2014 to deliver lower cost, long-term funding to SMEs.

It began lending last year, and aims to offer cheaper loans than other financial institutions. It was backed with an initial €800m by the State, the European Investment Bank, and Germany's state-owned KfW bank.

The legislation that enacted the SBCI allows it to lend up to €5bn over a period of five years.

Between March and December 2015, the average loan size advanced by the SBCI was €37,000. On average, the loans carry an interest rate 1.5 percentage points lower than the market rates.

SBCI chief executive Nick Ashmore said that the initial figures show that the more choice and competition generated in the SME lending sector, the more the SBCI can help businesses grow and support jobs.

He said he hopes to have an "active pipeline" of new lenders and funders in 2016.

Irish Independent

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