EIB reaffirms its commitment to job creation by providing in Spain its biggest ever loan for SMEs
The European Investment Bank (EIB) has provided a loan of EUR 1 billion to the Instituto de Crédito Oficial (ICO) to facilitate access to bank finance for SMEs (firms with up to 250 employees) and, to a lesser extent, midcaps (firms with up to 3000 employees). This is the biggest loan that the EIB has ever granted to a financial institution in the European Union for financing SME investment. The signing of this agreement underlines the EIB and ICO’s commitment to supporting small and medium-sized companies – the drivers of job creation and growth – by providing substantial resources on favourable interest rate and maturity terms. ICO will match the EIB funds with the same amount, meaning that loans totalling EUR 2 billion will be made available to Spain’s small businesses.
The loan agreement was signed in Madrid by EIB Vice-President Magdalena Álvarez and ICO’s chief executive, Román Escolano.
The EIB Vice-President said that "this operation represents a further step in our efforts to support small and medium-sized Spanish businesses, which are the basis of our productive fabric and the key to reviving growth and job creation". She added that the "the importance of this loan lies not only in its size – it is the biggest ever granted to a European financial institution – but also in the fact that thanks to our invaluable cooperation with ICO we are going to reach a larger number of banks and SMES, multiplying the benefits of this credit line".
The loan will mainly serve to finance the medium and long-term investment projects and working capital needs of companies in the primary, industrial and service sectors, helping them to safeguard and create jobs. It is estimated that around 45% of the total loan amount will go to projects in convergence regions.
A substantial part of the EIB loan will be channelled by ICO through mid-sized regional intermediary banks or institutions that have not been granted direct EIB credit lines. The aim of such intermediation is provide credit to the SME and midcap customers of these financial entities, so reaching virtually the full geographical and sectoral spectrum of final beneficiaries.
With today’s loan, since the beginning of the year the EIB has provided nearly EUR 9 billion for projects in Spain, around half of which has served to finance investment by small Spanish businesses, almost doubling last year’s support for this sector.