The European Investment Bank (EIB), the European Union's financing institution, is providing Banca Italease with a EUR 206.5 million (1) (ITL 400 billion) structured financing arranged by Paribas and Finanziaria Internazionale. Banca Italease SpA will utilise the proceeds for the financing of leasing projects promoted by small and medium-sized enterprises (SMEs).

The financing structure represents an innovative solution for the financing of SMEs. It adapts the concept of global loans to provide a wider access to EIB resources for leasing projects.

The loan's main objectives are to increase the productivity and competitiveness of SMEs, to promote investments leading to a more rational use of energy and to support projects aiming at environmental protection and reduction of pollution.

Owned by various "Banche Popolari" which can count on an extensive network of branches across Italy, Banca Italease is one of the main providers of lease financing to SMEs in this country.

Lease financing is one of the most important sources of external finance for SMEs in Italy, particularly those with less than 100 employees. Hence, leasing makes a considerable contribution to the development of SMEs by easing access to credit, favouring the modernisation of production plants and contributing to the creation of new employment.

A global loan is a financing instrument under which the EIB makes funds available on a long-term basis to a financial intermediary for onlending in lesser amounts to small and medium-scale enterprises. The Bank has established an extensive network of about 130 active intermediaries for global loans to SMEs, covering the entire Union.In 1998 EIB's lending to Italy has increased by 30% over 1997 to EUR 4387 million. A third of total lending went to industry. Loans for individual industry projects amounted to EUR 3359 million and global loans, primarily in favour of SMEs, topped EUR 1028 million.

(1) 1 EUR: 1 936,27 ITL, 0.666300 GBP.