OECD proposes more sustainable, funding alternatives for small firms

A functioning SME loan securitisation model — incorporating the selling of such debt via covered bonds — is required in Ireland, according to the OECD, in order to meet the need for more alternative sources of funding for the country’s small business community.

In its preliminary review of the Government’s Action Plan for Jobs programme, published yesterday, the international economic think-tank said that “more sustainable, market-based funding alternatives should be explored — such as SME loan securitisation (including covered bonds) and mezzanine (hybrid debt/equity) financing instruments.”

It did note, however, that the 2014 edition of the Action Plan for Jobs programme “contains commitments to develop alternative sources of finance for SMEs”.