AIB unveils range of plans to boost investment in sector

RESOURCES COMMITMENT:AIB YESTERDAY sought to stress how small and medium-sized enterprises (SMEs) were at the "core" of its business.

The bank said it serves 180,000 SMEs across the State, and it now plans to “mobilise” its resources to deliver on its commitment to the Government to release €6 billion in funding to the sector by the end of 2011.

This began on May 25th with the launch of a €500 million small business recovery scheme.

AIB said it now plans to seek an additional tranche of funding from the European Investment Bank to continue to support investment in SMEs.

It plans to promote asset finance funds to assist in the purchase of plant and machinery, and a PromptPay Fund for short-term working capital for SMEs and professional services firms.

The bank said yesterday that it would also amend the terms of its invoice discounting to broaden its availability, and that it plans to launch an additional €100 million fund for SME environmental, clean energy and innovation projects.

In addition, AIB will develop a new package for exporters, and has committed to launching an additional €20 million seed capital fund.

It has already made €53 million available in conjunction with Enterprise Ireland.

An SME helpline is to be launched, and the bank said it plans to run a series of customer roadshows across the country. There will also be a “customer engagement programme” by its senior executives.

The bank has agreed to provide a monthly report to the department of finance and the credit review office on its efforts.

AIB approved 52,000 credit applications by SMEs in 2009, totalling €2.5 billion in value. Nine out of 10 “formal” applications were given the green light.

“Demand for SME credit among AIB customers remains weak, with demand falling in quarter one 2010 compared to the corresponding period of 2009,” AIB said.

Credit quality also deteriorated last year, with increases in criticised and impaired SME loans.