The European Investment Bank (EIB) and BNP Paribas Fortis have signed a new partnership agreement concerning a EUR 150 million EIB loan for Belgian SMEs at the request of small businesses and following the deployment of a similar loan granted in August 2009. Building on the previous operation, branches of the BNP Paribas Fortis network will onlend the EIB funds in loans to small and medium-sized enterprises in support of their investment projects.

Through its “Loans for SMEs” programme, the EIB – the EU’s financing institution – makes funds available to small and medium-sized enterprises to provide backing for their investment projects. To reach SMEs, the EIB works together with commercial banks, which act as intermediaries and utilise their branch network and local knowledge.

The “EIB Loan for SMEs” product takes the form of a credit line that BNP Paribas Fortis onlends to small businesses with fewer than 250 employees across a wide range of economic sectors eligible for EIB financing. The projects have to be carried out in the European Union and cost a maximum of EUR 25 million each. They may not consist of refinancing or purely financial or property transactions. This new EIB lending formula for SMEs was introduced as part of the measures supporting economic recovery. It is flexible and transparent, including in terms of the information provided to businesses, and ensures that the final beneficiaries receive the benefits of EIB funding – mainly in the form of lower interest rates – of which they are explicitly informed. This new EIB-BNP Paribas Fortis financing facility follows on from a previous EUR 150 million loan deployed in 2009 and 2010 in support of the projects of small Belgian businesses.

Jean-Laurent Bonnafé, CEO of BNP Paribas Fortis, said: “The loan granted last year was enthusiastically received by Belgian businesses.  A total of more than 500 firms in all sectors – services and industry – benefited from this loan on highly favourable terms.  We are pleased to be able to repeat this experience, which has been of capital importance to Belgium’s small businesses – the backbone of our economy”.

EIB President Philippe Maystadt stressed “the importance of maintaining the flow of financing to small businesses, their projects and related jobs”, underlining “the EIB’s proactive policy in this area and rapid deployment of resources to support investment from the very first signs of the crisis”.

Thus a growing number of SME projects have attracted EIB-backed loans since the beginning of the crisis in September 2008: more than 50 000 in 22 EU countries in 2009, and some 60 000 (mid-December estimate) in 24 countries in 2010 with loans averaging EUR 150 000, compared to 33 000 loans in 20 countries in 2007.

In Belgium, the big banking networks granted EIB-backed loans totalling around EUR 400 million to more than 5 300 SME projects in 2008 and 2009 – three times as much as in the pre-crisis years.

Note:

The EIB – European Investment Bank – is the long-term financing institution of the European Union. It is owned by the 27 EU Member States and its remit is to foster the achievement of the EU’s objectives through its activities. It raises funds on the capital markets (where it has a AAA credit rating) in order to finance projects that are in line with EU strategies on the best possible terms. Responding to the need for investment support, in 2009 the EIB signed loans totalling EUR 79.1 billion, including EUR 70.5 billion for projects within the European Union (up 37% on 2008). EIB loans mainly target economic and social cohesion, environmental protection, research and innovation, small business support, the development of the trans-European transport and energy networks, and the establishment of a sustainable, competitive and secure energy supply.

BNP Paribas (www.bnpparibas.com) is one of the world’s six most robust banks according to Standard & Poor's*. With a presence in 85 countries and more than 205 000 employees, including 165 200 in Europe, BNP Paribas is a global-scale European leader in financial services. It holds key positions in its three main business areas: Retail Banking, Investment Solutions and Corporate & Investment Banking. The Group has four domestic retail markets in Europe: Belgium, France, Italy and Luxembourg. BNP Paribas also has a significant presence in the United States and strong positions in Asia and the emerging markets. For further information on BNP Paribas Fortis, go to www.fortisbank.com.

*In its peer group