EIB attaches high importance to small and medium-sized enterprises
The European Investment Bank (EIB) attaches the highest importance to supporting small and medium-sized enterprises in order to promote growth and jobs in Europe. The President of the EIB, Werner Hoyer, stated during the annual meeting of the EIB’s Board of Governors in Brussels: “The EIB sees its support for small and medium-sized businesses in the current economic climate as a number one priority.” Following the EIB’s paid-in capital increase of EUR 10 billion last year, the EU bank will lend an additional EUR 15 billion to SMEs during 2013 to 2015.
The EIB is also open to exploring new financing tools to help alleviate the financial constraints on SMEs. The EIB, the European Commission and the European Central Bank (ECB) have been discussing how to strengthen the credit supply for SMEs, in particular in Europe’s peripheral countries. The talks are at an early stage. President Hoyer emphasised during the Board of Governors’ meeting that securitisation could be a useful tool to revive SME lending, but stressed that prudence was needed, “bearing in mind the experience of the subprime crisis.”
He said that the EIB would keep up its efforts to alleviate the financial constraints on businesses in the most effective way. In Greece, for example, the EIB is setting up a Guarantee Fund dedicated to EIB lending in favour of SMEs, structured on a portfolio first-loss basis. The Bank has also approved its first-ever trade finance facility of EUR 500 million, to support a trade volume of EUR 1.5 billion. In Portugal, the EIB signed last November an innovative Portfolio State Guarantee providing for a lending envelope of up to EUR 6 billion over the next few years. Furthermore, in the light of the challenging market conditions, the EIB is considering increasing the number of EIB-supported companies by extending the range of its banking partners where possible.
The EIB President also addressed the growing problem of youth unemployment in Europe. He emphasised that the EIB would “do its utmost” to help improve the situation. One option for the EIB could be to link favourable loan conditions to the creation of new jobs for unemployed young people. The Bank has already gained experience in financing vocational training schemes at EU level, pan-European student loan programmes and the modernisation of educational facilities itself. President Hoyer stated that the EIB stands ready “to do even more”.