The State's financial sector should become less dependent on bank lending, Minister for Finance Michael Noonan said yesterday, with the availability of extra credit from non-traditional sources helping to drive economic growth.
Speaking at Dell’s Dublin campus as the company announced details of a new financial services business, Mr Noonan said he hoped the European lending market could become more like that in the US, where 75 per cent of credit does not come from traditional banks.
“One of the biggest problems developing now in Europe is the lack of credit and if there were credit lines available to industry, and especially small businesses, Europe would be growing much stronger than it is,” he said. “That’s the blockage now that is in the system.”
The Central Bank this summer granted Dell the first banking licence handed out in the State for some four years and Mr Noonan said he was pleased by the development as it was the “first tangible result” of a wider policy the Government has been seeking to develop.
Dell Financial Services is to provide finance to its customers for IT solutions and to SMEs to invest in new technology. It has invested some €400 million in the venture.
The business will fund clients so they can regularly rotate their IT to keep them up to date. It will also provide leasing facilities for IT products on a three-year rotation basis in an effort to reduce the total cost of ownership to businesses, Dell said.
The company has established the EMEA headquarters of Dell Financial Services in Dublin, and added some 200 jobs at its Cherrywood campus in the first phase of the project, bringing its staff in Ireland to some 2,500. Workers at its Limerick base are also involved and a further 100 jobs are expected to be created in the next three years, Dell said.
'Vote of confidence'
Taoiseach Enda Kenny described the move as a "great vote of confidence" at a time when the Government was working to "rebuild the economy and financial services sector."
Aongus Hegarty, Dell's EMEA president, said the company was already providing finance solutions to SMEs and larger companies in eight countries – including Ireland, the UK, Belgium and Germany – and that further expansion of the business was now planned.
Earlier this month, Dell chief executive Michael Dell won shareholder approval for a planned $24.9 billion buyout, ending a seven-month stand-off with investors and giving the firm space to attempt a turnaround of its fortunes away from the public markets.
Minister for Jobs Richard Bruton said Dell had grown and changed its business model from predominantly being a PC maker to a services provider. He said this was a position the Government was familiar with having had to change the trajectory of the Irish economy.
Mr Bruton said Ireland was moving from being “an economy that was perhaps locked on to a sector that was not sustainable, in property, and we’re getting back to what is important for a small open economy; being able to provide services, products and win markets internationally”.
