The Strategic Banking Corporation of Ireland has agreed a new partnership deal with Microfinance Ireland (MFI) worth €30m.

MFI becomes the 14th on-lender of lower-cost SBCI loans for small Irish businesses, expanding further the range of funding options available in the SME market.

The new SBCI funds will allow Microfinance Ireland to increase its lending capacity and offer lower rates on its standard loan products.

MFI provides its loans through the Government's Microenterprise Loan Fund and its purpose is to help start-ups and established businesses to get the finance they need for their business.

The loans will have competitive interest rates, a maturity of up to five years, with amounts available of up to €25,000 and flexible repayment schedules.

The Strategic Banking Corporation of Ireland was set up in 2014 to ensure that SMEs in Ireland have access to stable, lower-cost, long-term funding options.

Minister for Finance Paschal Donohoe said the new partnership means that the SBCI will be able to assist Microfinance Ireland in its mission to deliver the Government's Microenterprise Loan Fund and support small businesses who may be having difficulties in accessing funding for their business.

"The SBCI offers a wide range of supports to the SME sector and welcoming MFI as its 14th on-lender continues the SBCI's work to expand on-lenders beyond the retail banks, meaning that more SMEs are able to access credit from an increased diversity of sources in both bank and non-bank credit," Mr Donohoe added.

SBCI chief executive June Butler said the last 18 months has been a very difficult time for all businesses in Ireland.

"In keeping with the SBCI's mandate to offer low-cost credit to Irish SMEs while driving competition and innovation in the Irish finance market, today’s announcement offers a great new option that will go a long way towards helping many businesses thrive into the future," she added.

Des McCarthy, CEO of Microfinance Ireland , that after seeing a very significant increase in demand for its loan products over the past 18 months, MFI is delighted to have secured this €30m in new liquidity.

"This funding will allow us to support an even greater number of start-ups and established micro-enterprises with fewer than 10 employees and up to €2m annual turnover. The rate offered on this SBCI funding will lead to a reduction in the rates we charge our borrowers thereby making our loans more affordable for our customers and supporting more of them with their business plans," Mr McCarthy added.