Germans sign off on €800m SME loan fund
GERMAN Finance Minister Wolfgang Schaeuble will be in Dublin this week to sign off on a part-German supported €800m lending fund for Irish SMEs.
Mr Schaeuble will be joined by the head of the European Investment Bank (EIB) Werner Hoyer, as well as Finance Minister Michael Noonan and Public Expenditure and Reform Minister Brendan Howlin at a joint signing ceremony launching the Strategic Banking Corporation of Ireland (SBCI) on Friday.
The state-backed SBCI, which was announced last May, will make up to €800m available for small and medium businesses.
Under the scheme, existing main street banks will borrow from the SBCI and lend to SMEs. The banks will assess the risk of lending and will continue to hold that risk, but must demonstrate that the lower cost of their sourcing the funds is passed on to SMEs, in order to avoid a breach of European state-aid rules.
SBCI will have a lower cost of funding, providing a potentially cheaper option for businesses to access financing.
Money will initially come from German development bank KfW, the Ireland Strategic Investment Fund (ISIF) and the European Investment Bank (EIB).
A spokesman for Mr Noonan said the signing on Friday will allow the money to be released.
Lending is likely to begin before the end of the year, with a memorandum of understanding close to being signed with the two main banks.
The bank was incorporated as a company on September 12 and the interim board held its first meeting last week.
Last month it emerged that the chief executive of the SBCI will be the first head of a state-owned bank to be hired without being subject to a formal €500,000 pay cap since the crash.