herald

Monday 23 October 2017

SMEs to borrow cash from bond markets

ENTERPRISE

The Irish Stock Exchange (ISEQ) is working with the Government to create a market in bonds backed by Irish SME debt.

It will mirror a new structure pioneered in Germany where mid-sized companies are now able to bypass banks to borrow through the capital market.

"We are working with the Department of Enterprise, Enterprise Ireland and the Department of Finance to see is there a credible - or on what basis could we have - a credible bond market for mid-sized enterprises in Ireland," ISEQ chief executive Deirdre Somers said.

Germany's Deutsche Borse has already developed a market that allows investors to buy into securities made up of and backed by incoming generating SME debt.

The decline in bank lending since the financial crisis is now seen by policy-makers across Europe as a crisis. In Ireland the National Pension Reserve Fund has pumped hundreds of millions of euro into a number of loan funds for SMEs, but with limited impact.

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