The European Investment Bank (EIB), the European Union's long-term financing institution, has made available a loan for 60 million euro (10 billion pesetas) (1) to Caja de Madrid and its subsidiary Corporación Financiera Caja de Madrid S.A., towards financing small and medium-scale investment projects carried out by SMEs and local authorities.
This is the first global loan (essentially a line of credit) advanced by the EIB to this institution, which in business volume terms is Spain's second largest savings bank and the sixth largest banking group in the country. Caja de Madrid has branches throughout Spain, although around 60% of its activity is concentrated in the Madrid area.
The EIB's line of credit will enable Caja de Madrid to expand its medium and long-term lending for small and medium-scale ventures in the industrial, agricultural processing, tourism and service sectors, as well as for smaller-scale infrastructure schemes in the fields of health and education. Funds from the global loan may also be channelled to urban renewal projects.
The EIB was founded in 1958 under the Treaty of Rome, which created the European Economic Community, with the aim of fostering enhanced integration, balanced development and economic and social cohesion in the Member States by providing long-term financing for capital investment furthering attainment of European Union objectives.To support small and medium-scale projects, the EIB makes use of its global loan facility, devised by the Bank in 1968. Global loans are basically lines of credit opened to banks and other financial intermediaries operating at national, regional or local level, which pass on the proceeds, in the form of sub-loans, for smaller-scale investment schemes complying with the EIB's lending criteria.
(1) Conversion rates used by the EIB : EUR 1 = 166.386 ESP, 0.705455 GBP.