Irish SMEs to benefit from €350m European loan fund

The European Investment Bank (EIB) is finalising agreements to extend three new-generation EIB loans for small and medium sized enterprises (SMEs) in Ireland for a total of €300m, it was announced today.

The three recipient banks AIB, Ulster Bank and Bank of Ireland, will act as financial intermediaries for the EIB funds, passing them onto SMEs with projects which further EU policy objectives.

These loans complement €50m of EIB funds which were recently made available to Bank of Scotland (Ireland) to finance investment projects by small businesses.

Irish enterprises should start to benefit from the EIB loans for SMEs within the coming weeks.

Minister for Finance Brian Lenihan welcomed the news.

"I very much welcome the support of the European Investment Bank in providing this significant lending facility for small and medium sized enterprises, which are of critical importance to the European economy in general and to smaller economies such as Ireland’s in particular," said Lenihan.

"I very much appreciate the efforts of the EIB officials and the participating Irish banks in bringing the initiative to fruition. It is a very positive signal of the joint capacity of Europe and Ireland working together to meet the credit needs of the enterprise sector."

The EIB loans for SMEs carry particular importance in the current financial and economic climate when many smaller businesses face difficulties in accessing finance.

Plutarchos Sakellaris, EIB vice president responsible for lending activities in Ireland, confirmed the bank’s commitment to supporting SMEs.

"Ensuring access to finance for small businesses is essential for the Irish economy and it is a crucial element of the EIB’s newly-adopted measures to help Europe through the current financial and economic crisis," said Sakellaris.

"We have finalised agreements for three new loans to Allied Irish Bank, Ulster Bank and Bank of Ireland and we are hopeful that our increasingly rich relationships with Irish banks will lead to similar success in the future."

Small businesses play a key role in the Irish economy and account for more than half of the total private sector workforce.