Irish small and medium enterprises (SMEs) pay on average three percentage points more interest on loans than the European Union average on amounts up to €250,000.

The introduction of Government-backed risk-sharing schemes, such as the Brexit Loan Scheme (where interest is capped at 4pc), are helping to address the difference, according to the Strategic Banking Corporation of Ireland (SBCI).

Total lending supported by the SBCI has now passed €1bn, the agency said. It was set up to ensure favourable loan rates are available to SMEs, by funnelling State-sourced money through the banks. The agency says it supports just over 26,000 SMEs.

However, recently the country’s main banks stopped using the SBCI’s main original scheme, because low interest rates meant lenders could access cheap money themselves. In response, the SBCI has shifted towards risk-sharing schemes including credit guarantees to finance providers.

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