Access to the EU finances for SMEs: key to economic recovery
A joint European Commission/European Investment Bank Group report on the activities facilitating access to finance for small and medium-sized enterprises in 2012 was recently published. The report highlights the EU’s efforts to assist financially the European SMEs: approvals of loans for SMEs increased to € 14.0 billion in 2011 of which € 12.6 billion came from the EU instuitutions.
At a meeting of the SME Finance Forum, on the eve of the Informal Competitiveness Council in Dublin, European Commission Vice President Antonio Tajani, responsible for Enterprise and Industrial policy, launched a new single online portal for all EU financial instruments for SMEs. At the same time, a web-based information guide for SME stock listings was revealed to promote SME listings and stimulate investors’ interest in SMEs and mid-caps.
High-level meeting in Dublin was convened at the initiative of Antonio Tajani and Richard Bruton, the Irish minister for Jobs, Enterprise and Innovation; some other participants were present too, e.g. from the European Investment Bank (a person responsible for SMEs) and a chief executive of the European Investment Fund. They discussed the outcomes of the EU’s efforts to assist SMES.
More than 15 billion for SMEsUnder the Commission CIP program for 2007-12 the following activities were presented:
= With a budget of € 1.1 billion, the CIP program has helped to mobilise over € 15 billion for SMEs across Europe.
= SME guarantee facility (SMEG) through its guarantee schemes, assisted CIP in financing nearly 220 000 SMEs with access to over € 13.3 billion in loans.
= The high growth and innovative SME facility (GIF); the CIP-funded investments in venture capital funds already supported investment in over 250 fast growing SMEs for € 2.3 billion.
The joint Commission/EIB report covers the results of the current schemes in favour of European SMEs as well as new generation of financial instruments for SMEs and the important enhancement of financial resources for SMEs through the increase of the capital in the European Investment Bank with € 10 billion.
The joint report summarises the numerous measures implemented by the EIB Group (the European Investment Bank and the European Investment Fund) as well as the measures provided within the framework of the European Commission’s initiatives, such as the Competitiveness and Innovation Program (CIP), the European Progress Microfinance Facility, the Risk Sharing Instrument Facility (RSI) and/or the Joint European Resources for Micro to Medium Enterprises (JEREMIE).
The EIF’ activity supported:
= guarantees to 43 financial intermediaries to stimulate new loan portfolios of € 1.2 billion and mobilising over € 5 billion of additional resources;
= € 40 million in Microfinance commitments mobilising a total of € 114m; and
= commits over € 600 million of Structural Funds for the benefit of SMEs to financial intermediaries across 14 JEREMIE Holding Funds, with an absorption rate of 24%.
Once the CIP program comes to an end in 2013, the Program for the Competitiveness of enterprises and SMEs (COSME) will cover the timeframe for 2014-20.
The European Commission has put forward its proposals for the next generation of financial instruments for SMEs. They have proven their worth through the leverage effects involved and they assure more efficient use of the limited EU budgetary resources.
COSME, specifically created for SMEs, will be a funding instrument which will largely continue the activities of the current CIP program, but will even better respond to SME needs:
= Its equity facility for growth-phase investment will provide SMEs with commercially-oriented reimbursable equity financing, primarily in the form of venture capital through financial intermediaries.
= Second, a loan facility will provide SMEs with direct or other risk-sharing arrangements with financial intermediaries to cover loans.
The COSME instruments will be complemented by financing for research- and innovation- driven enterprises under the Program Horizon 2020.
Eugene Eteris, European Studies Faculty, RSU, Riga Baltic-course.com
