EIB, EIF and EC launch facility to help technology-based SMEs get loans for RDI
11 December 2011
The European Investment Bank (EIB), the European Investment
Fund (EIF) and the European Commission, have launched a new guarantee
facility for innovative small and medium-sized enterprises (SMEs) to
help them access finance from banks.
The new risk-sharing instrument for SMEs will be managed by the EIF.
In addition, the EIB and the European Commission are to provide
extra resources for research infrastructures.
"Investing in research and innovation carried out by SMEs means that
we will have more growth, sustainability and competitiveness in
Europe" said European Research, Innovation and Science Commissioner
Máire Geoghegan-Quinn. "The Risk-Sharing Finance Facility has proved
to be one of the most successful parts of the EU's 7th Research
Framework Programme, and through co-operation with the EIB has
already unlocked significant new investment for research,
development and innovation."
“Without raising its potential through research and innovation,
Europe will be unable to generate the growth it needs to maintain
its place in the world economy," said EIB President Philippe
Maystadt. "The Risk-Sharing Finance Facility has already helped many
large and mid-cap companies realise their plans. With the changes we
are announcing, we are confident that SMEs will now also benefit."
The SME risk-sharing instrument (RSI) will be managed by the EIF.
The EIF will offer banks a guarantee on part of their new loans and
leases to innovative SMEs, allowing the banks to lend more and to do
so at more attractive rates.
"Innovative SMEs in their start-up and early stages have
particular difficulties in accessing finance," said EIF Chief
Executive Richard Pelly. "The new RSFF guarantee window, the
Risk-Sharing Instrument, addresses this funding gap and helps these
dynamic and fast-growing SMEs to start and grow their businesses."
The amendment to the existing RSFF agreement was signed by
Commissioner Máire Geoghegan-Quinn and by EIB President Philippe
Maystadt at the start of the 2011 Innovation Convention in Brussels.
It is expected to unlock a further €6 billion of loans until the end
of 2013, including up to €1.2 billion for SMEs and up to €300
million for research infrastructures. From 2014, in conjunction with
new instruments for equity finance, the Commission intends to scale
up and expand the RSFF under the proposed Horizon 2020 Framework
Programme for Research and Innovation.
The Risk-Sharing Finance Facility (RSFF)
If the EU is to reach its target of investing 3% of its GDP in
research, it needs to boost private sector investment in R&D and
innovation. An important pre-condition for achieving this is
mobilising finance. However, financial markets and institutions are
often reluctant to back research- or innovation- intensive companies
or projects due to the relatively high levels of uncertainty and
risk inherent in their activities.
The RSFF, launched in 2007, was a direct answer to this challenge.
It improves access to debt financing for promoters of research and
innovation investments by sharing the underlying risks between the
EU and the EIB. Together, the European Commission and the EIB are
providing up to €2 billion for the period 2007-2013 (up to
€1 billion each). These contributions translate into billions of
additional financing available to innovative companies and the
The RSFF has
helped 75 companies benefit from over €7 billion in EIB loans
to projects enhancing European growth and competitiveness.
The Horizon 2020 Framework Programme for Research and Innovation.
RSFF for SMEs: the Risk-Sharing Instrument (RSI)
The RSI aims to encourage banks to provide loans and leases of
between €25 000 and €7.5 million to SMEs and smaller mid-sized firms
undertaking research, development or innovation, with loan periods
of from two to seven years, and with the risk finance covering
investments in assets (tangible or intangible) and/or working
The EIB will mandate the European Investment Fund
(EIF) to manage the RSI. The EIF, in turn, will enter into
individual guarantee agreements with banks following the submission
of applications to the EIF under an open call for expressions of
interest, which will be launched in early 2012. Applicant banks will
be treated on a first-come, first-served basis, subject to their
meeting the requirements of the EIF's standard screening and due
Under the terms of each agreement, the EIF will
provide, in return for a fee, a guarantee to the bank concerned
against loan defaults. For each default, the bank would receive 50%
of the amount of the loan outstanding. Some 10 or so banks are
likely to be involved, and the RSI plans to reach up to 500
beneficiaries with a total loan volume of up to €1.2 billion.