The European Investment Bank expects to sign loan agreements with Irish banks next year in a bid to help businesses get access to funds, EIB vice president Plutarchos Sakellaris said today.
The EIB plans to make €30 billion ($38.82 billion) in capital available to small- and medium-sized businesses (SMEs) in the European Union, to help shore up their access to credit while lending conditions are tighter.
Mr Sakellaris said the EIB was in talks with four major banks in Ireland, without giving further details.
"We are hoping, because we do see things quite positively, that in the first quarter of next year we will have some deals with at least some of them," he told RTE in an interview this morning.
Mr Sakellaris met with Finance Minister Brian Lenihan yesterday during a visit to Ireland. Mr Lenihan has urged Irish banks to utilise the EIB facility to the "maximum extent possible" to help speed up funding to businesses.
"They are very eager to borrow from us. They are very motivated," Mr Sakellaris said. "We have promised them that we are going to do our diligence as quickly as possible."
Mr Sakellaris said the banks will be "contractually obliged" to pass on better borrowing rates to the SMEs.
"At this time of financial crisis it should make a big difference because we are seeing the credit crunch in all European economies towards the SMEs in various sectors," he said.
"We are stepping in with fresh funds that commercial banks will have available to pass on. So we are alleviating to some extent the credit crunch," he said.
Reuters