The signing of a credit line fostering youth employment brings the number of medium to long-term lending agreements in support of Italian firms concluded by the European Investment Bank (EIB) and the UBI Banca Group in the past three months to three – for a total amount of €350 million.
These initiatives are being mounted in the framework of the long-standing partnership between the EIB and UBI and are designed to further strengthen support for Italy’s productive sector, soften the impact of the financial crisis and help to stimulate economic recovery.
Especially innovative is the €50 million loan signed in Milan last Thursday aimed at fostering youth employment in small and medium-sized businesses under the Jobs for Youth programme recently launched by the EIB at the request of the European Union to tackle the growing problem of unemployment – especially youth unemployment.
The UBI Group has undertaken to also provide its own funds to the beneficiary firms, thereby increasing the total amount of financing made available in support of Italy’s economy.
“With these operations we are further strengthening our partnership with UBI, a group that has demonstrated its sensitivity to the Italian economy’s needs through its commitment to supporting SMEs and midcaps and is quick to deploy new facilities such as loans under the Jobs for Youth programme, which is aimed at tackling the Europe-wide plague of youth unemployment”, said EIB Vice-President Dario Scannapieco.
“Creating jobs for young people is one of the country’s top priorities and it is right for us to contribute innovative solutions”, said UBI Banca’s CEO, Victor Massiah. “This agreement with the EIB will enable us to deploy dedicated instruments supporting bold business ventures that can nurture the green shoots of economic recovery”.
Youth employment (€50 million)
The €50 million EIB credit line will be channelled by the UBI Group’s network banks to start-ups, SMEs (firms with up to 250 employees) and midcaps (firms with between 250 and 3000 employees) that are creating new jobs for young people in the 15 to 29 age group. Firms meeting at least one of the following criteria will be eligible for loans:
- they have hired at least one worker (three in the case of midcaps) aged between 15 and 29 in the six months prior to the loan request or will do so in the following six months;
- they comply with the provisions of Law 99 of 2013 on the promotion of youth employment;
- they provide vocational training programmes or internships for young people;
- they work together with a school, technical college or university to employ young people (e.g. in summer internships);
- they have an ownership structure in which the majority of the capital (over 50%) is held by young people under 29 years of age.
Small and medium-sized enterprises (€200 million)
A loan of €200 million has been provided to support Italian SMEs (firms with a consolidated workforce of up to 250), with the EIB funds being deployed on particularly favourable terms. The credit line will exclusively target SME investment in new projects or schemes already underway and will be made available to firms in all productive sectors.
The following investments and costs will eligible for financing:
- acquisition, renewal and expansion of tangible assets (excluding land);
- medium and long-term working capital needs;
- investment in intangible assets;
- generational change of ownership or transfer to ensure the continuation of a company’s business.
Projects costing up to €25 million will be eligible for financing with loans of up to €12.5 million. Pure financial investment and real estate projects are excluded.
Midcaps (€100 million)
A maximum of €100 million will be made available to customer firms with between 250 and 3000 employees in all productive sectors to finance similar needs to those described for SMEs.
The EIB funds will especially be used to finance small (costing up to €25 million) and medium-scale (costing up to €50 million) projects.