THE GOVERNMENT IS planning to establish a new bank for lending to the small and medium enterprise sector.
A Department of Finance official confirmed that there will be a memo on the proposal passed to Government this week.
The mooted size of the bank’s war chest is around the €800 million mark. It will be called the Strategic Banking Corporation of Ireland, but it won’t have a branch network, with loans being administered by existing high street banks instead.
The cash will be raised from a variety of sources, including German government-owned bank KfW, the European Investment Bank and the Ireland Strategic Investment fund. It will be run by the National Treasury Management Agency.
The terms offered by the bank are thought to include cheaper rates of funding, which will be achieved by accessing the low interest rates attached to loans from the above sources and passing them on to borrowers.
A source close to the process declined to comment on reports that repayment terms will be over a period up to ten years, but advised that they will be “longer than is currently available in the market.”
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