On Thursday 7 September, the European Court of Auditors reached its verdict on two EU loan guarantee programmes for innovative companies and SMEs. The verdict, “there are too many” SMEs that have benefited from these programmes that did not “really need them”. The judges also regret the lack of data provided by the European Commission about the impact of the two programmes.
The analysis of the Court focused on the InnovFin mechanism covering innovative enterprises, as well as the guarantee for SMEs. It should be recalled that these loan guarantees seek to help European Small and Medium-sized Enterprises access finance through loans through financial intermediaries. Over the course of the current period, around €1.78 billion is expected to be raised from the EU budget to cover potential losses on the loans and programme management. This contribution will increase to €3.13 billion with the European Fund for Strategic Investment (EFSI).
The Court of Auditors considers that a significant number of beneficiary enterprises would not “have struggled to obtain financing" without requesting these instruments and did not need a loan guarantee. According to the auditors this is a problem because by supporting companies that already have access to commercial loans, the EU instruments are competing with the private sector. The “guarantee for SMEs" section of the InnovFin mechanism also only concentrates in a very limited way on companies active in the innovation and research domains. The auditors also point out that public intermediaries obtain much better results for supporting innovative enterprises than private intermediaries. Finally, they also indicate that there are also many similar instruments at national level.
Therefore, according to the report, the Commission should: improve the targeting of viable enterprises that do not have sufficient access to finance; target innovative enterprises under the InnovFin mechanism; and ensure better coordination with existing instruments at national and regional levels. (Original version in French by Pascal Hansens)