Brussels, 03/06/2008 (Agence Europe) - 'It is clear that the market alone is unable to provide sufficient and appropriately priced finance for SMEs, in particular for high growth, innovative businesses… The EIB Group will seek to address gaps in the market by broadening the scope of its financing,' said Philippe Maystadt, President of the European Investment Bank (EIB), at the fiftieth annual meeting of its Governing Council (of the EU27 finance ministers) in Luxembourg on Tuesday 3 June 2008. Details about the new measures will be unveiled later in the year.
The EIB's new approach involves broadening the range of financial products available and adapting
them to meet local needs and the requirements of SMEs. The loan criteria for the 'global loans' granted by the EIB (credit lines awarded to banks that then lend the funding on to companies) will be updated to cut red tape for the banks and the beneficiary SMEs. In return, the EIB will require that the banks make it crystal clear to their clients that this is EIB funding, and the banks should hand the benefits arising from the EIB's funding on, whether it be longer-term loans, more flexible repayment timeframes, the option of having the loan converted to a different currency, or simply lower interest rates. The EIB and the European Investment Fund (EIF) will work more closely together. New products will be made available in areas like mezzanine finance, guarantees and microcredit with the aim of simplifying loan criteria and meeting the needs of SMEs at different stages of maturity. The aim is to aid certain sections of the market - those that find it the most difficult to raise funds - and develop solutions to share with partner banks the risks of investing in small businesses. The EIB is also planning to broaden its support beyond the traditional focus on fixed assets to finance intangible aspects of a company's growth, like R&D, building up distributions networks, and helping companies survive when their owners retire. Alongside this approach to SMEs, the EIB governors exchanged views on the EIB's cooperation with other international financial institutions in investing in the Western Balkans. (O.L.)