Ireland’s sovereign fund could act as a catalyst for the development of domestic peer-to-peer lending, despite a likely small commitment if it were to proceed.

Eugene O’Callaghan, director of the €7.6bn Ireland Strategic Investment Fund (ISIF), told IPE any move into the market “won’t be big, and it won’t have a massive impact”.

But he confirmed an allocation was still under consideration after a request for proposals concluded in April.

At the time, the fund said it would consider exposure to invoice and supply chain finance, as well as longer-term loans.

Ireland’s sovereign fund targets peer-to-peer lending.

O’Callaghan noted that peer-to-peer lending had proven successful in other countries.

“In the US and the UK, there are good examples of that, and it’s a new market channel, which could profitably and sensibly be catalysed,” he said.

“Our money can probably catalyse and accelerate that taking hold as an option, both for savers and borrowers, in Ireland.”

ISIF’s interest in peer-to-peer lending stems from its desire to increase the number of ways small and medium-sized enterprises (SMEs) can access funding.

Committing €500m to a number of SME lending funds was one of the first steps taken by the former National Pensions Reserve Fund to realign its strategy toward Ireland ahead of its transformation into the ISIF.

It has since broadened to offer credit to property developers in a joint venture with KKR and in July unveiled its investment strategy focused on real assets, venture capital and private equity.

For more on ISIF’s investment strategy, read IPE’s interview with Eugene O’Callaghan