Microfinance Ireland cuts interest rates for SMEs

Microfinance Ireland, the State-backed SME lending vehicle, has announced a 1% cut in the interest rates it charges borrowers.

MFI has also said that in partnership with the nationwide network of Local Enterprise Offices (LEOs), it is introducing a mentoring/support programme aimed at offering expert assistance to approved loan applicants.

“The interest rate cut and mentoring support will mean our business loans are now even more affordable.

"It also means that our clients can receive expert one-to-one mentoring through their Local Enterprise Office, greatly increasing their chances of commercial success and helping to sustain jobs in the longer term,” said Microfinance Ireland’s newly appointed chief executive Garrett Stokes.

“This is a valuable support for micro-enterprises, ensuring they can reach their potential,” Enterprise Ireland’s head of entrepreneurship, Niall O’Donnellan added.

The standard fixed rate of APR applicable to businesses applying directly to Microfinance Ireland for a loan will now drop from 8.8% to 7.8%, with the rate for those applying via LEOs reduced from 7.8% to 6.8%.

There has always been a 1% differential between the direct and LEO routes. Micro-enterprises can apply for loans of between €2,000 and €25,000 through either channel.

“Both the interest rate cut for new lending and the provision of mentoring for Microfinance Ireland clients are very positive steps in supporting local enterprise, improving economic recovery and developing business growth overall,” said the Local Government Economic, Enterprise, and Tourism Committee’s Paul Reid.