State's SME lending slumps as Brexit saps demand for credit
Lending by the State-backed Strategic Banking Corporation (SBCI) slumped last year, and even a high-profile €300m Brexit loan scheme to help businesses ride out the impact of the UK's exit from the EU saw little uptake.
Businesses borrowed €123m from the SBCI last year, made up of 3,038 loans at an average of €40,487 each. That was just a third of the lending in 2017.
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The SBCI was set up in September 2014 to ensure access to credit for SMEs. It operates by channelling affordable credit through the main banks and non-bank lenders like Finance Ireland.
The low lending figures for last year bear out commentary from the banks, suggesting a lack of appetite among SMEs to take on borrowing risk.
Of the borrowing that did happen, the agricultural sector grabbed the lion's share, at 29.4pc of lending, followed by construction (13.7pc).
In March 2018, SBCI launched a €300m Brexit Loan Scheme with the Departments of Business, Enterprise and Innovation, and of Agriculture and Food. Demand has been low. Just €12m of loans had been drawn down during 2018 - to date loans of €30m have been approved.
"The modest deployment in the nine months to end-December 2018 is a clear reflection of SMEs remaining reluctant to invest in an environment of increased uncertainty and risk as Brexit approaches," SBCI said.