The government has announced the establishment of the Strategic Banking Corporation of Ireland (SBCI) which will provide an initial €500 million lending fund to high-growth SMEs by the end of the year.

The Irish Strategic Investment Fund (formerly the National Pension Reserve Fund), the Kreditanstalt für Wiederaufbau (Germany’s state development bank) and the European Investment Bank will provide the initial funding to the SBCI which will lend money to SMEs through other institutions including existing retail banks.

It is intended that the SBCI will have a minimum of €500 million available for lending by the end of this year and will provide loans to SMEs on longer and more favourable terms than are currently available from commercial banks.