Hard cash for nation’s SMEs - Good news for jobs

THERE was more good news on the jobs front yesterday in a loan package worth €400m for Ireland’s small and medium enterprises (SMEs).

The difference between this and other more nebulous recent announcements is that the package, wrapped by the Strategic Banking Corporation Ireland, contains hard cash.

Specifically approved by Government last year to enhance the supply of credit to Ireland’s SMEs, the corporation will lend money on a low cost, long-term basis through institutions called ‘on-lenders’. In the present deal, the funding goes equally to AIB and Bank of Ireland and they will give out the loans. Effectively, SBCI is financed by Germany’s promotional bank (KfW) the European Investment Bank and the Irish Strategic Investment Fund. The key advantage of the SBCI is its lower cost of funding and the fact that it can lend to on-lenders for between two and 10 years.

It is hard to quibble with the Coalition mantra that providing more credit for business means more jobs. The Taoiseach says that’s “the key to securing Irish recovery”. Arguably, if the same level of commitment was given to improving the lot of those on the margins of Irish life, it would be all the more impressive. An economy is simply a narrow segment of society, albeit an important one. In times of austerity, the time-worn slogan that a rising tide lifts all boats has little relevance if some of them are full of holes.