One-third of cash set aside for SMEs not lent
THE European Investment Bank (EIB) has lent just two-thirds of the money set aside to help small and medium businesses in Ireland last year.
The bank is determined to lend the rest of the money through the country's three main banks, EIB vice-president Plutarchos Sakellaris said in Dublin yesterday.
The funding is specifically for new investments rather than working capital and is designed to ensure that investment in small business continues.
The bank set aside €260m for small firms last year out of a record €1.02bn earmarked for Irish infrastructure, energy, schools and businesses.
The figure is likely to be less than half that amount this year as the economy slowly recovers.
"We are involved in counter-cyclical investment," Mr Sakellaris said as he described the level of lending to small- and medium-sized enterprises (SMEs) as "satisfactory".
The EIB was created in 1958 to lend money to projects across Europe and further afield. The bank, which is controlled by the EU's 27 finance ministers, was given €70.5bn last year to lend across the EU at close to the cost of borrowing.
Typical projects here included an electricity connection between Ireland and Wales, wind farms, schools in Limerick and Cork, and business lending.
Allied Irish Banks and Bank of Ireland were each given €100m credit lines last year, while Ulster Bank was given €60m to lend on the EIB's behalf. News that not all the money has been lent comes as many businesses complain that they are not getting loans from banks as the credit crunch continues to bite.
Mr Sakellaris, who also met Finance Minister Brian Lenihan and Central Bank governor Patrick Honohan, said the bank had agreed in principle to make a contribution of up to €500m to the 19km-long Dublin Metro project, which aims to link Dublin Airport with the city centre. The bank was examining two other public-private partnership projects to create part of a second western transport corridor between Cork, Limerick and Galway, he added.
Agreements could be signed next year.