SBCI Funding for Irish SMEs: Support and Impact
Learn about the Strategic Banking Corporation of Ireland (SBCI) and its role in providing funding support to Irish SMEs. Discover how SBCI aims to bring down borrowing costs, increase finance accessibility, and enhance competition in the Irish credit market. Explore SBCI's lending, risk-sharing, and services, along with its impact in supporting thousands of SMEs. Gain insights into the SME market overview and the use of guarantees to address market failures and promote financial access.
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Presentation Transcript
Strategic Banking Corporation of Ireland SBCI Funding Supports Sean Farrell - Head Product Development, Marketing & Research The Credit Union Green Lending Conference - 20th May 2022
Who are the SBCI? National Promotional Institution Owned by the Department of Finance Set up in September 2014 Objectives Bring down the price of borrowing for Irish SMEs Make access to finance easier for SMEs in Ireland Increase the competition in the Irish Credit Market 2
What do we do? LENDING Provision of low cost, long-term wholesale finance to partner lenders for onward lending to SMEs. RISK-SHARING Provision of portfolio guarantees to lenders to address specific market failures. SERVICE PROVIDER The SBCI operates the Covid-19 Credit Guarantee Scheme on behalf of the Department of Enterprise, Trade and Employment. 3
Progress across lines of business to December 2021 No. 46,000 SMEs supported 2.8bn funding Source: SBCI 2021 Year-end Statement 5
National, Cross-Sectoral Impact SBCI funding Sectoral breakdown Year to 31 December 2021 Loans numbers: % by Region Year to 31 December 2021 6
The SME market - Overview Micro enterprises (<10 employees) account for 92% of all enterprises The Central Bank recorded new bank lending to Irish SMEs of 4.1 billion in 2021. Approximately 53% of all SME outstanding debt is to retail banks, while other non-bank bodies accounts for 46%. Credit Unions only account for 1%. How many CU personal customers are also SMEs? 7
What does a guarantee look like? Sample 80% uncapped portfolio guarantee from SBCI to Finance Provider with EIB counter-guarantee 8
Why use guarantees? Address market gaps / failures Reduce interest rates Promote unsecured lending where appropriate (increase access to finance) Lengthen repayment terms (up to 10 years for FGLS) Value for money: Leverage public funds / multiplier effect 9
Upcoming SBCI Risk-Sharing Schemes Energy Efficiency Loan Scheme (EELS): Consumer Retrofit Loan Scheme: SBCI pilot guarantee scheme for SMEs investment in energy efficiency; SBCI loan scheme to provide low-cost finance to home owners and landlords to support buildings energy upgrade to B2 equivalent BER; Expected in the market in Q22022. Invitation for Pre-Qualification closes on 3rd June 2022; Potential role for Credit Unions Expected in the market in Q4 2022. 10
Conclusions - Key Takeaways SBCI s commitment to continue supporting the economic development in Ireland by developing products that deliver effective, innovative and low- cost financial support to Irish businesses. Important role played by the Credit Unions to assist and back local businesses and communities. Role of Risk sharing Future schemes with Credit Union participation 11
Strategic Banking Corporation of Ireland Treasury Dock Building, North Wall Quay Dublin 1, D01A9T8, Ireland Sean.Farrell@sbci.gov.ie E www.sbci.gov.ie
