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SMALL AND MEDIUM-SIZED enterprises are likely to benefit from lower interest rates on loans provided from a German investment bank following an agreement between the government here and in Berlin.
In the wake of Ireland’s decision to exit the bailout programme without a precautionary credit line, the German government offered the services of its state-owned investment and development bank, KfW, whose officials were in Dublin this week.
Under the terms of a deal reached with the government here, KfW will be able to assist SMEs with loans at interest rates lower than they would be able to access from Irish banks.
The Taoiseach Enda Kenny explained how an SME looking for a loan of half-a-million euro at Irish rates would be expected to pay about 4.25 per cent interest whereas the rates offered by KfW would come in at about 2 per cent.
“We expect to be able to put together a structure and a facility with KFW for assisting small and medium enterprises in terms of access to credit here,” Kenny said.
Representative groups such as ISME, Irish Small and Medium Enterprises, have been critical of the slow pace of Irish banks’ decision-making in relation to loans.
In September, ISME’s Mark Fielding pointed to a decline in lending to SMEs as indicating that banks are not lending to the level appropriate to an economy “on the mend”.
“The statistics from our own Central Bank, the ECB and numerous economists, demonstrate the dearth of appropriate credit. We must put an end to the fiction that bailed out Irish banks are functioning properly,” he said at the time.
KfW was formed in 1948 as part of the Marshall Plan to rebuild Europe in the aftermath of World War II and primarily financed reconstruction projects. Its name originally comes from Kreditanstalt für Wiederaufbau, which means meaning Reconstruction Credit Institute.
The bank is majority owned by the Federal Republic of Germany with a fifth owned by the country’s individual states. The head of its supervisory board is the current German Finance Minister Wolfgang Schäuble.
KfW was described by the popular German tabloid, Bild, as “Germany’s dumbest bank” in 2008 when it transferred €300 million to Lehman Brothers on the day the American investment bank collapsed as part of routine currency transactions.
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Love them or hate them the Germans have a properly functioning democracy where business and industry thrives and Germany is by far the richest country in Europe. They must be doing something right! By contrast we have a dysfunctional banking system, inept regulation, mediocrity at every level of our civil service and a stench of greed and corruption being exposed every week in lots of areas of life. If we have to rely on a German bank to assist our SME sector then let them at it. As a country we seriously need to reinvent ourselves. If only we had the leadership. Some day!
Well said Mary !!
Its the way of life. Germany doesn’t put up with inefficiency or cheating. Here its a badge of honour.
Nice to see BUT what we need is a write down of our debt so the people have more cash in their pockets ,This is what started the madness, cheap euros from a euro currency country with to much cash reserves. We get cheap money it creates a false reality where the REAL reality needs to be faced up to.. I agree our banks are complete bankers. Our Govt need to admit that the plan is not working and the banks are not operating properly.. There is no hiding the fact that our economy will need another bail out. The EU are kicking the can down the road… We have such huge debt because they forced our WEAK govt to repay the unsecured gambling bondholders in order to save the euro currency. Dont bash the Irish we didnt create this mess , we stupidly followed a stupid dream and voted YES YES YES Ireland is now seeing how manipulated we have been by our own Govt. and the EU project of federalism Its all a fcuking mess…
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AIB and bank of Ireland need to get there house in order or the Germans will do it for them.
Whatever it takes to kick Irish banks into action I suppose.
I think good news for small and medium business because low cast of interest can boast the the economy
No such thing as a free dinner and if it sounds too good to be true well it generally is
My wager says that the German Investment Bank will not lend where an Irish Bank has already refused. We already know that a huge proportion of loan applications from SMEs have a questionable background in terms of Norman lending criteria.
Wow thanks Angela, a true friend of Ireland. Her role in our recovery cannot be underestimated. Thank you so much Angela from the decent people of Ireland :)
Gotta love ze Germans
Germany is no friend of ireland. Does Merkel standing in the way of €64 billion ring any bells with you
Galway look up the word sarcasm
Angie the milf milf milf milf !!!!!!
I was replying to Enda 1. Though that was fair obvious
I know he was been sarcastic
Germany is not our friend in any way don’t fall into the Irish trap of forgiving and forgetting to quick this is just a side show nothing more.
But what about the German tourists? They’re very friendly.
He wasn’t being sarcastic he’s a troll I’ve seen him around
You enda1 …begrudger0 ,has to be the most useless troll of them all !
At least she didn’t get thanks from you,so!
This move from the German bank could be very significant in kickstarting job creation in rural areas where its needed most right around the country.
This can only be good news, our banking sector needs a serious shake up and a competitive powerhouse European bank is the answer.
We need an open market for banking across the euro zone . Ireland’s current banking sector is rotten and stagnant
SEPA?
Sepa simply replaces interbank payments, direct debits etc.
I can’t apply to Sepa for finance can I !
Germany has a lot of cash right now that they need to use up so as to not upset the eurozone. They charge us an arm and a leg for sovereign debt and then undermine our banks with cheap loans and we should be grateful? The longer our banks can’t compete against cheap loans , the longer it will take for the economy to recover. The Germans certainly know what they are doing.
Undermine our banks ? Our banks beat them to it
Paul this is what started the madness cheap euros from a euro currency country with to much cash reserves. We get cheap money it creates a false reality where the REAL reality needs to be faced up to.. I agree our banks are complete bankers. Our Govt need to admit that the plan is not working and the banks are not operating properly.. There is no hiding the fact that our economy will need another bail out. The EU are kicking the can down the road… We have such huge debt because they forced our WEAK govt to repay the unsecured gambling bondholders in order to save the euro currency. Dont bash the Irish we didnt create this mess , we stupidly followed a stupid dream and voted YES YES YES Ireland is now seeing how manipulated we have been by our own Govt. and the EU project of federalism Its all a fcuking mess…
Please Enda – we own a big slice of our banks – MAKE them loan at low interest rates. It’s a disgrace that they’re getting away with it again despite government promises.
So you’re going to make the institutions / investors who lend money to these banks reduce their interest rates? Good luck with that.
Thanks Enda you excellent diplomacy over the past two years has allowed this to happen, well done to you sir :)
Germany is running a surplus an it’s people don’t want to borrow, of course they want to loan money to others in the EU that they control.
Great idea – let’s make our indigenous industry reliant on a state-owned German bank. I have to wonder if KfW is one of those bondholders we were stopped from burning?
Ze Germans are coming
Was it not cheap money from Banks that helped get us into the mess we are in now???
Greed makes bubbles.
The rest of the continent also had cheap credit…. Only the inept countries crashed from it.
Those who ignore history are condemned to repeat it.
Sorry my bad they just left
Does that mean we can get a loan to pay off the electricity bill, the property tax, the water charges, the television licence, the rubbish collection charges, etc. etc.?
PATRICia accept the one world.
you are a beautiful lady with all the right attributes to make the right man happy.
FIND YOURSELF A NICE BANKER. FORGET THE POOR. LET THE DUCKS THROW THEM BREAD IF THERE HUNGRY.
ITS NOT THAT WE MUST THINK OUTSIDE THE BOX BUT TO ALLOW OURSELVES TO BE CONSUMED BY THE BIGGER BOX.
I TRULY BELIEVE YOU WILL BE IRELANDS IVANA TRUMP DEMANDING WIND TURBINES ON THE WICKLOW MOUNTAINS.
we have to be able to give up some rights to allow professionals to keep us safe in the areas of food safety, transport, passive smoking (studies have now show deaths are increasing due to the lethal combination of passive smoke and carbon emmissions) AND global WARMING)
you must abandon your jaded but somtimes gifted cynicism PATRICIA .you who must think the sun might not rise tommorow.
Wish that someone could put you in a bigger box!
tom accept one world government..only the strong survive. forgot all these peasants on this who are so poor they create gmail accounts just to eat spam
That’s much better,Morm!
Morm. A one world government will only exacerbate the present problems in the world. No man can save others from death, but some men want to enslave others in life. I trust in God to save me from mere men, (and women) and their vain pursuits
Just as well she’s got both hands up in the photo
KfW FTW!
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