Central Bank: SMEs will need up to €5.7 billion in funding to weather coronavirus storm
The Central Bank has said that small and medium-sized businesses will need up to €5.7 billion in emergency cash as a result of the Coronavirus lockdown to cover costs.
The deputy governor of the Central Bank, Ed Sibley, said that SMEs have a really important role to play in the Irish economy, both socially and through their employment of over one million people.
Mr Sibley told RTE’s The Business programme that there is potentially a need for State grants and guarantees for the sector, but also for the banking system to support SME’s with lending and payment breaks.
He said that the sector needs a high degree of support to get them through the shock of the current crisis.
Any state supports, he said, need to be appropriately targeted, rationed and must not ‘socialise losses that should be being taken by the private sector’ – including banks or landlords.
He said the Central Bank are making sure there is a good flow of liquidity into the system and that private sectors support through banks and lenders is available.
The Central Bank is also ensuring there is stimulus into the economy through the Euroepan Central Bank to maintain operational capacity in the system to support households and businesses.
Mr Sibley said the the implementation of payment breaks will give a degree of breathing space for those SMEs who borrow to continue to function.
He said there may be a need for state supports for those getting back to business in the short term, and longer term for those SMEs that don’t bounce back when the health restrictions are lifted.
He said the State has already stepped in and it will be a blend of measures needed including a role for the banking system.
Mr Sibley said a high degree of uncertainty going forward and over the last decade the Central Bank has built a much more resilient banking sector which should be able to support the economy.
He said the Central Bank expected banks to support their customers, while continuing to lend prudently and look at the affordability for borrowers in relation to mortgages.
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