Participating countries in the European Union provide guarantees proportional to their share in the European Investment Bank (EIB) or other institutions. The guarantees will cover losses that may occur in the EGF operations of the EIB Group - including the EIB and its specialised SME-financing arm, the European Investment Fund.
The availability of guarantees from participating countries is decided by a Contributors’ Committee made up from representatives of these countries. The countries will cover losses according to their share in the EGF.
The EGF provides these guarantees to free up capital for national promotional banks, local banks and other financial intermediaries in order to make more financing available for small and medium companies, mid-caps and corporates.
By sharing credit risk across all of the European Union, the overall average cost of the fund is less than the cost in comparable national schemes. Additionally, participating countries will benefit from the sharing of the EIB’s top-level credit rating.