Brussels, 19/10/2000 (Agence Europe) - The European Commission has begun a formal examination procedure relating to State aid in favour of a venture capital scheme notified by the British authorities. The regime in question provides for at least one risk capital fund aimed at SMEs and financed by the government and private investors to be set up in each of the English regions, in the aim of making up for the lack of venture capital available to these small and medium-sized companies. According to the British authorities, this will fill a gap in the provision of risk capital for investment of amounts of between £100,000 and £500,000 (GBP) in SMEs located outside the London region where most risk capital companies are located. This gap can be explained by the fact that the return on such relatively small investments is insufficient compared to high administrative costs. The government therefore intends to release GBP50 million for this programme over a three year period, while private investors should contribute up to five times this amount. According to an estimate, nearly 300 SMEs could benefit from investment in the form of own capital each year. The government will hold a minority share of each fund. Public resources to be allocated to each of them will, on one hand, benefit the private investors of each regional fund that will receive a higher return and, on the other, SMEs in which the funds invest and which, without this regime, would not have been able to obtain capital. The measure comprises an element of State aid in this sense. The Commission specifies that it is indeed in favour of the idea of promoting the venture capital offer in favour of SMEs, but remains vigilant when State aid is foreseen to achieve this end.