Pension fund to help SMEs
The National Pension Fund is to invest in small businesses, announcing three new funds which will provide equity, credit and restructuring investment to Irish SMEs.
The NPRF will invest up to €500 million across new the funds which include an SME equity fund, an SME credit fund and an SME turnaround fund.
The turnaround fund will invest in underperforming businesses which are at or close to the point of insolvency but have the potential for financial and operational restructuring, while the credit fund will lend to larger SMEs and mid-size corporates.
NPRF chairman Paul Carty said SMEs were the backbone of the domestic economy, adding "that the development of these new financing options will enhance their ability to contribute to economic recovery".
Minister for Finance Michael Noonan said the work of these funds would also complement the credit available to SMEs from the pillar banks.
"I have been informed by the Credit Review Office that both AIB and Bank of Ireland met their commitment to make credit of €3.5 billion available to SMEs in 2012."
The Irish Small & Medium Enterprises Association (Isme) said the initiative was "an essential component" in Ireland's economic recovery, while the Small Firms Association (SFA) also welcomed the announcement.
"The funding schemes have the potential to deliver financing to support expansion and assist those firms that need to restructure for survival," said Avine McNally, SFA assistant director.