Banks no longer using credit schemes SBCI small and medium business

  • Banks no longer using credit schemes SBCI small and medium business
    Independent.t. E.
    Leading banks have stopped using State Fund, created to channel the low cost of financing for SMEs, because lenders are unable to access cheap money in their own right, the Irish independent has learned.
    https://www.independent.ie/business/small-business/latest-news/banks-no-longer-using-sbcis-sme-loan-scheme-37224639.html
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Leading banks have stopped using State Fund, created to channel the low cost of financing for SMEs, because lenders are unable to access cheap money in their own right, the Irish independent has learned.

Strategic Banking Corporation of Ireland (SBCI) was established to provide favorable rates on loans reaching SMEs, through the provision of public sources of money through banks, which then may transfer the benefit. Irish SMEs pay some of the highest rates in Europe.

But SBCI Chairman Conor O’kelly – Executive Director of the National Treasury management Agency said that the banks were to bypass the SBCI because they have access to low interest rates on the open market.

In comments contained in a letter to Finance Minister Paschal Donohoe and released under the freedom of information rules.

“Previously, we reported that low interest rates have reduced the financial advantage of the SBCI for banks,” the letter reads.

“It was obvious after among SBCI Bank lenders, like Bank of Ireland, prepaid EUR 50 million of credit, and the Allied Irish Banks and Ulster Bank were fully deployed and looking for further lending at the present time,” Mr. O’kelly in a letter.

In the SBCI also has a number of non-Bank institutions on Board to take the money and pass it. In a letter dated September 22 last year, said the SBCI was “committed to developing its pipeline of non-Bank lenders will continue to move suitable for small and medium-sized enterprises”. However, it does not provide a new lender since November of 2016.

Initially, lenders were required to pay in SBCI, but the state of the body, then continued to develop so-called “risk-sharing”, where he is also on the hook if the loans go bad.

Read more:the SBCI should be redeveloped on a rainy day the lender for Ireland’s SME sector

He secured the Ulster Bank and AIB participation in these schemes, which are divided into the objects specified in the letter Kelly. One scheme, which came into force after the letter to Kelly, is the scheme of crediting of the Government for businesses affected British exit from the EU, which is administered by the SBCI. Another focused on agriculture.

In SBCI said he “is working on the developing market and needs to upgrade their products and supply as economic conditions change.”

“This led to the SBCI successfully supports the expansion involves separating the risk … the distribution of risk will allow lenders to increase their appetite for credit risk for SMEs requires less of a Deposit as security.”

He said that the AIB and Ulster Bank “did not require any additional liquidity,” but were active participants in the distribution of risks leaving the UK and agriculture. In SBCI also said that it is working on a new enterprise risk with further announcements to be made in the prescribed manner.

A representative of the Ulster Bank said that the Bank has “a longstanding relationship with SBCI” and can be associated with a number of initiatives that began after the letter to Mr. O’kelly was sent, including lending program in the UK out of the EU.

“Ulster Bank is committed to providing industry expertise and financing specialist and products SBCI-one of a number of supports we provide for business.”

The representative of AIB said it was “working closely with the SBCI since its inception and continues to do it,” marking his participation in the withdrawal of great Britain and agri-centric schemes.

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