The country's banks are to give €25 million to a new Government-ordered agency that will offer flexible loans to charities, community organisations and entrepreneurs from poor areas.
The Department of Finance and the banks have worked for over a year on the scheme, which will be launched on Thursday by the Minister for Finance, Brian Cowen.
Known for now as the Social Finance Initiative, it will offer repayable finance to projects and businesses that cannot secure mainstream funding, though beneficiaries will have to clear strict hurdles before qualifying.
The money will be collected by the Irish Bankers' Federation by the end of this month. Brendan Whelan has been appointed chief executive of the new agency on an interim basis.
The SFI's board members will be Peter Quinn representing Quinn Consultancy Services and the GAA; Cyril Forbes of Jardine Lloyd Thompson and Dublin Docklands; Diarmuid Bradley, Permanent TSB and Institute of Bankers; Felix O'Regan of the Bankers' Federation; Sheila Norden of the Irish Charities Tax Research Ltd; Kathleen Prendergast of South Tipperary County Council and Gerry McGee, Mohill Community Development Association and Leitrim Network.
A private social capital fund known as "Clann Credo", set up by Sr Magdalen Fogarty and the Presentation Order in 1996, has raised €10 million from charities and religious congregations since.
Loans have been given to community and voluntary bodies, including a west Dublin youth project, a transport service for the elderly and disabled in Baldoyle and a Kildare drug rehabilitation centre.
A number of other social finance providers exist, including the Western Development Commission and Triodos Bank, a Dutch-based "ethical" bank set up in 1980.
The new body will select a number of intermediaries over coming months from community development finance institutions, and, possibly, venture capital organisations.
The intermediaries will have to demonstrate credit and financial competence, display a track record in social finance, be able to operate at least at regional level and have strong corporate governance in place.
The new agency expects to begin sharing the banks' funding to the selected intermediaries by next May, sources close to the work told The Irish Times yesterday.
In Budget 2005, Mr Cowen scrapped a three-year old bank levy which had raised €100 million a year, though he quickly indicated that he would expect some of the money to go to the new fund.
Described as "social finance", the money is to be used to fund projects that can have a positive impact on local communities - but, critically, they must also be able to produce enough revenue eventually to repay the monies.
In the US, some individuals and organisations struggle to get loans from banks simply on the basis of their address - a practice known as "red-lining".