The Ireland Strategic Investment Fund (ISIF) will invest €30m into the country’s largest non-bank lender, Finance Ireland.

The €8bn sovereign wealth fund has “conditionally agreed” to take a 32% stake, according to a statement from Finance Ireland, and will nominate two directors for the lender’s board.

Last year, PIMCO bought a similar stake in the company through a private equity vehicle it runs.

Finance Ireland lends to small and medium-sized enterprises (SMEs) in the agriculture, motor and commercial real estate sectors.

It expects to provide “in excess of €300m in new lending” to Irish businesses this year.

The ISIF and Finance Ireland began working together earlier this year as part of a group providing €100m of loans to milk suppliers.

The two firms teamed up with Rabobank and Glanbia Co-operative Society to launch the Glanbia MilkFlex Fund.

Eugene O’Callaghan, director at the ISIF, said: “[Our fund] was attracted by the opportunity to support an established and experienced management team to expand its non-bank platform and in particular grow its SME and agri-leasing businesses.

“This investment complements the products provided by other non-bank platforms in the SME sector the ISIF has supported.”

Finance Ireland founder Bill Kane added: “This significant investment by the ISIF underpins our very ambitious growth plans for the coming years. 

“Our mission is to create a major non-bank lender in the Irish financial landscape offering customers a real alternative to the traditional banking sector, and we are well on the way to achieving that.”

This is not the first time the ISIF has invested in SME funding – in March, the fund was announced as the cornerstone investor in a €30m fund backed by BMS Finance.