4th October 2023
Scheme provides reduced interest rate loans to small businesses, farmers and fishers
Thirteen Credit Unions represented by Metamo, the Irish League of Credit Unions (ILCU) and the Credit Union Development Association (CUDA) have joined the €1.2 billion Ukraine Credit Guarantee Scheme as lenders.
The scheme was launched at the beginning of this year and facilitates loans for working capital and medium-term investment to assist businesses with liquidity and in improving energy efficiency.
The important features of the scheme are:
- no personal guarantee or collateral required for loans up to €250,000
- loans of up to 6 years and €1 million
- reduced interest rates (vs standard market rates)
- pre-eligibility available on Strategic Banking Corporation of Ireland (SBCI) Hub which speeds up the process
Businesses will have certainty that their liquidity funding needs can be met through low-cost loans supported by the government. This is a central pillar of the government’s response to aid businesses impacted by rapidly rising costs as a result of the invasion of Ukraine.
Minister of State at the Department of Enterprise, Trade and Employment, with special responsibility for Business, Employment and Retail, Neale Richmond TD, said:
“The impacts of Russia’s illegal war in Ukraine are still very much being felt by Irish businesses, from supply chain challenges to cost increases.
The expansion of the Ukraine Credit Guarantee Scheme to include Credit Unions provides more options for Irish businesses, which is always welcome. Credit Unions are at the heart of Irish communities and this development will ensure that they are best placed to support their customers and local businesses.
Given the challenges posed by the war in Ukraine, low-cost loans of up to €1 million, with up to €250,000 available with no personal guarantee, can be transformative for Irish businesses.”
Minister of State at the Department of Finance, with responsibility for Financial Services, Credit Unions and Insurance, Jennifer Carroll MacNeill TD, said:
“I’m so happy to see Credit Unions join the Strategic Banking Corporation of Ireland as on-lending partners for the Ukraine Credit Guarantee Scheme.
Credit Unions are embedded in every community across the country and their participation will increase choice and competition in the lending market and provide much-needed liquidity to many local businesses.
The government is determined to support SMEs, primary producers and small mid-caps who continue to face significant challenges in relation to inflationary pressures in the energy and commodity markets resulting from the Russian invasion of Ukraine by making up to €1.2 billion of low-cost working capital available – and Credit Unions can play a significant role in this area.”
Minister of State at the Department of Agriculture, Food, and the Marine, with responsibility for Research and Development, Farm Safety, and New Market Development, Martin Heydon TD, said:
“The expansion of the Ukraine Credit Guarantee Scheme will enhance the scheme by providing a greater choice of lenders. This will particularly benefit rural communities, which continue to be well-served by the credit union movement. The UCGS is available to farmers, fishers, and food businesses to help them deal with increased costs arising from the invasion of Ukraine by Russia providing access to short-term, affordable finance which is important for the viability of the agri-food sector.”
Denis Cleary, Interim CEO of Metamo said:
"We in Metamo are delighted to have worked closely with the SBCI and our member Credit Unions to successfully achieve their selection and funds allocation in the UCGS scheme. Metamo’s ethos is driven by our desire to help our Credit Unions serve the important needs of their members and customers. The Ukraine Credit Guarantee Scheme is a prime example of how Metamo and the CU sector are collectively helping the economic activity in Ireland by facilitating the provision of finance to business customers. We are confident this scheme will be a great success and we look forward to collaborating on further initiatives of this nature going forward.”
David Malone, CEO of the Irish League of Credit Unions (ILCU) said:
“We know businesses are working in an extremely challenging environment, which has been exacerbated by the conflict in Ukraine. Securing access to affordable credit is vitally important to our members who have been adversely impacted by increased costs and supply chain disruptions, including increases in energy costs. Through this scheme, participating credit unions will be in a position to help provide local businesses with the access and supports they need to help them to grow. Credit unions are at the heart of the community, and we recognise the importance of local businesses and how important this scheme will be to them.”
Kevin Johnson, CEO of the Credit Union Development Association (CUDA) said:
“Credit Union Development Association ‘CUDA’ announced today that two of its large credit unions, Capital Credit Union and Credit Union Plus, with a combined membership of over 100,000 are now successfully partnering with Department of Enterprise, Trade and Employment on the low-cost Ukraine Credit Guarantee Scheme through BizFin, a business lending collaboration that offers secured and unsecured lending. We are delighted that our Credit Unions can support local businesses within their communities, that are impacted by the economic consequences of the conflict in Ukraine. CUDA believes that credit unions will succeed in working with micro, small and medium sized businesses, including primary producers, adversely impacted and that are facing supply chain disruptions and increased input costs, including energy costs. If you would like to know more about how you can apply for a Ukraine Credit Guarantee Scheme Loan, please contact Capital Credit Union or Credit Union Plus directly.”
June Butler, CEO of SBCI said:
“I am delighted to welcome the participation of Credit Unions in the Ukraine Credit Guarantee Scheme. Their addition further diversifies the options available to Irish businesses under this scheme, providing SMEs, farmers, and fishers with a broader choice of finance providers. Credit Unions are embedded in communities across the country, and business owners will be able to seek advice from local staff with whom they already have an existing relationship.
The Ukraine Credit Guarantee Scheme, through its on-lenders such as CUDA, ILCU and Metamo credit unions, is supporting Irish businesses to get access to low-cost, flexible finance as they deal with the economic consequences of high inflation, increasing input costs, and supply chain disruptions.”
Ends
Note for Editors
Ukraine Credit Guarantee Scheme
The main features of the scheme are as follows:
- This is a scheme for SMEs, primary producers, and small mid-caps (defined as businesses with up to 499 employees). SMEs are expected to be the main beneficiaries.
- To qualify for the scheme, the borrower will have to declare that costs have increased by a minimum of 10% on their 2020 figures and that the loan is being sought specifically as a result of difficulties being experienced due to the Ukraine crisis.
- Loans will be available to viable businesses only and it must be a new loan with no refinancing.
- The ceiling of funding available under the UCGS is €1.2 billion.
- A guaranteed rate of 80% for the State with the lenders retaining 20% of the risk of the loan.
- The current standard facility size of €10,000 to €1 million under the current Acts will remain for the UCGS.
- The products covered under the scheme include a broad range of credit facilities including overdrafts, working capital and term loan facilities.
- Capital and/or interest moratoria for specific periods of time (up to three months) will be permitted under the scheme but any decision regarding such moratoria will be at the discretion of the individual lender based on their assessment of their customer.
- The scheme has been prepared in order to comply with the terms of the European Commission’s Temporary Crisis Transition Framework for State Aid. In particular:
- Primary agricultural, fisheries and aquaculture producers may be included.
- A guaranteed premium on each loan under the scheme is required to be paid in addition to interest rate costs. The premia range for SMEs is 0.29% for loans of 1-3 years and 0.68% for 4-6 years. For small mid-caps, the range is 0.73% for 1-3 years and 1.55% for 4-6 years.
- The scheme is timebound and will be available until 31 December 2024.
- Businesses apply through the SBCI Hub, via sbci.gov.ie. This is an easy-to-use online application. If successful, the applicant will receive a code which can be used at any participating finance provider.
Credit Unions participating in the Ukraine Credit Guarantee Scheme
Access Credit Union Limited - Skibbereen, Co. Cork
Altura Credit Union Limited - Gorey, Co. Wexford
Capital Credit Union - Dundrum, Dublin 14
Cara Credit Union Limited - Tralee, Co. Kerry
Connect Credit Union - Dundalk, Co. Louth
Credit Union Plus - Navan, Co. Meath
First Choice Credit Union Limited - Castlebar, Co. Mayo
Listowel Credit Union - Listowel, Co. Kerry
Naomh Breandain Credit Union - Loughrea, Co. Galway
Savvi Credit Union Limited - Sir John Rogerson's Quay, Dublin 2
St. Canices Kilkenny Credit Union Limited - Kilkenny
Synergy Credit Union Limited - Fermoy, Co. Cork
Thurles Credit Union Limited - Thurles, Co. Tipperary
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