EU Access to Finance Day Berlin, 18 June 2014 1
EIB activities for SMEs: Past achievements and future products Structure of presentation 0. Overview of EIB Group activities 1. EIB products for SMEs Key priority for EIB 2. EIBGroup deliveries to SMEs in Germany 3. New initiatives 4. Looking forward and conclusions 2
Providing finance and expertise for sound and sustainable investment projects Leading developer of risk financing for SMEs 3
Growth and jobs: four key priorities EIB Group works to promote sustainable growth and job creation in Europe and beyond 4
Different tools for different targets Loans but also: EIB catalyses investments LENDING BLENDING ADVISING Guarantees (trade financing) Equity participation Combining EIB financing with EU budget (Project Bond Initiative) Higher risk projects for innovation (RSFF) Attracting FUNDING for long-term growth Prepare & implement projects (JASPERS) Support for public / private partnerships (EPEC) 5
EIB at a Glance 1958 EU s long-term lending bank set up in 1958 by the Treaty of Rome Shareholders 28 EU Member States AAA-rated We re AAA-rated by all major rating agencies, with a strong capital base Governance Board of Governors:EU Finance Ministers Board of Directors:Member States, European Commission & External Action Service Management Committee: EIB s executive body Objective Providing finance and expertise for sound and sustainable investment projects in support of EU policy objectives Lending From ECU 10bn in 1988, annual lending of close to EUR 45bn in the mid- 2000s before jumping to EUR 79bn in 2009 as a temporary response to the crisis. In 2013, lending stood at EUR 72bn. Countercyclical role Capital increase in 2012 (by EUR 10bn) reinforcing the countercyclical role in times of crisis SME support Single largest policy priority of the EIB (provided EUR 18.5bn to SMEs in the EU and CPCs in 2013) 6 6
EIF at a Glance (I) EU specialised institution for SMEs risk financing Debt - Structuring and Guaranteeing portfolios of SME loans, leases and micro-credit Equity - Venture Capital and Mezzanine (fund of funds) Geographic Focus: EU 28, EFTA, Candidate Countries Distribution through Banks and Funds (Full delegation) Founded in 1994 & started VC activity in 1997 Multilateral Development Bank (MDB) status Basel II 0% risk weighting Aaa/AAA/AAA rating (Moody s/s&p/fitch) Shareholding Structure: EIB: 62.1% EC: 30.0% 25 European Financial Institutions: 7.9 % 7
EIF at a Glance (II) We manage resources from different stakeholders European Investment Bank Risk Capital Resources (RCR) EUR 7bn EREM Mandate: up to EUR 4bn over the next 7 years European Commission 2007-2013 Competitiveness and Innovation Framework Progr. (CIP) EUR 1bn allocated to equity and guarantees Risk-Sharing Instrument (RSI) EUR 270m Progress Microfinance EUR 205m National & Regional Funds 13 European and regional Funds-of-Funds including the Baltics, Germany, Portugal, Spain, Turkey and UK 14 Holding Funds supported by structural funds EUR 1.2bn 8
EIB Group activities for SMEs: Past achievements and future products 0. Overview of EIB Group activities 1. EIB products for SMEs Key priority for EIB 2. EIB Group Deliveries to SMEs in Germany 3. New initiatives 4. Looking forward and conclusions 9
New EIF instruments for SME finance some examples 2013: a record volume of EUR 1.5bn equity commitments achieved creating market traction (leveraging EUR 7.1bn) 2013: EUR 1.8bn of guarantees committed to financial intermediaries stimulating new SME lending and mobilising additional resources, leveraging EUR 8.6bn New European initiatives debt financing (guarantees): RSI - Risk-Sharing Instrument for innovative and research oriented SMEs/small MidCaps New securitisation approaches, e.g. SME Covered Bonds New European initiatives equity (Venture Capital): EAF - European Angels Fund SIA - Social Impact Accelerator Polish Growth Fund of Fund MDD - Mezzanine Dachfonds für Deutschland National initiatives: DVI - Dutch Venture Initiative CYPEF - Cyprus Entrepreneurship Fund Multi country initiatives: BIF - BalticInvestment Fund WB EDIF - Western Balkans Enterprise Development & Innovation Facility 10 10
EIB enhanced its support to SMEs and the EU economy New initiatives for SME financing 2013: Increased EIB SME lending in EU and CPCs to a record level of EUR 18.5 bn (50% increase on 2012) primarily through the standard Loan for SME (multi-beneficiary intermediated loan product) Increased EIF s credit enhancement capacity and expanding joint risk-sharing financial instruments in support of the SME securitisation market Gradually piloted EIB trade finance scheme in favourof SMEs across the EU, especially in crisis-hit Member States and where a market gap is proven Increased finance for innovative MidCaps: EIB Growth Finance Initiative (GFI) & MidCap Initiative (MCI) Contributed to sustain youth employment via the pilot programme Investing for Youth Jobs for Youth Strengthened cooperation with national development banks 11 11
Overview EIB Group SMEs/Mid-caps Products Microenterprises SMEs Mid-caps indirect indirect indirect/direct EIB Intermediated Loans EIB Mid-cap Initiative loans & gtees, RSFF Senior Loans / Guarantees EIF Microfinance EIF Guarantees and Securitisation EIB Growth Finance Initiative Hybrid / Mezzanine EIF RCR Mezzanine for Growth Equity EIF Venture and Growth Capital Funds of Funds, Tech Transfer, Business Angels EIF Products EIB Products 05/02/2014 12
EIB Group Product Range SMEs and small Mid-Caps < 500 Employees Intermediated SME/Mid-Cap Financing Mid-Caps < 3,000 Employees Intermediated and/or direct Corporate lending Large Caps Typically > 3,000 Employees Direct Corporate Lending Transaction Size EUR 25k EUR 7.5m EUR 25m EUR 300m Funding 1 st Valley of Death 2 nd Valley of Death Phases Pre-seed Seed Funding Start-up / Mezzanine/Growth Commercialization / Industrialization Growth / Stability 13
EIB Intermediated Lending: Loan for SMEs and Mid-Caps Main funding product of the EIB aiming at improving conditions and enhancing access to finance for SMEs Standardized product reaching a very large and diversified number of SMEs via Financial Intermediaries 3 Pillars: Transparency Transfer of Financial Advantage (ToFA) Complementarity Final beneficiaries are informed of EIB involvement Financial intermediaries benefit from financial value added and transfer an agreed share to the final beneficiaries EIB leverage effect min. 2 times 05/02/2014 14
EIB Direct Lending and Risk Sharing Instruments to the benefit of innovative MidCaps Growth Finance Initiative (GFI) = Direct financing (loans, quasi-equity and mezzanine) for amounts between EUR 7.5m EUR 25m to innovative MidCaps Mid-cap Initiative (MCI) = Senior risk sharing with financial intermediaries for innovative MidCaps Risk Sharing Finance Facility (RSFF) Other financing facilities of EIB and EIF, where appropriate, with the European Commission: Guarantees and counter-guarantees (via financial intermediaries), Risk-Sharing Finance Facility for SMEs and small MidCaps(RSI) 05/02/2014 15
EIB activities for SMEs: Past achievements and future products Structure of presentation 0. Overview of EIB Group activities 1. EIB products for SMEs Key priority for EIB 2. EIB Group Deliveries to SMEs in Germany 3. New initiatives 4. Looking forward and conclusions 16
EIB Group in Germany 25 20 EIB Group Access to Finance/SMEs 3,4 9000 8000 7000 6000 EIB Group Activities in Germany EUR bn 15 10 5 18,5 EIF EIB EUR m 5000 4000 3000 2000 5,500 7,800 2012 2103 0 Signed amounts 1000 0 Total 1,700 1,100 SMEs/MidCaps Total EIB Group for Access to finance/smes amounted to EUR 21.9bn in 2013 In Germany, total activity of the EIB Group amounted to EUR 7.8bn (+42%) of which EUR 1.7bn intermediated lending for SMEs (+55%) 05/02/2014 17
EIB activities for SMEs: Past achievements and future products 0. Overview of EIB Group activities 1. EIB products for SMEs Key priority for EIB 2. EIB Group Deliveries to SMEs in Germany 3. New initiatives 4. Looking forward and conclusions 18
Investing for Youth new initiatives in 2013 19
Possible EU-EIB Group Financial Instruments Research, Development, Innovation Jobs, Growth and Social Cohesion Central EU instruments Horizon 2020 Equity Facility for R&I SME and Small Mid Caps Guarantee Facility for RI (RSI successor) [EUR 1.1bn] for guarantees to SMEs/small mid caps. [EUR 450m] for equity Competitiveness & SME (COSME) [EUR 1.4bn] (current prices): Equity Facility for Growth (GIF successor) [EUR 690m] Loan Guarantee Facility (CIP successor) [EUR 746m] Social Change & Innovation Progress Microfinance II Social enterprise investing [EUR 192m] Creative Europe Cultural and Creative Sector Guarantee Facility [EUR 120m] Erasmus for all Student Loan Guarantee Facility [EUR 606m] Joint instrument New SME Initiative Pooling of resources from European Structural and Investment Funds (ESIF), COSME and Horizon 2020, EIB/EIF and national promotional banks Guarantees of new loans to SMEs, securitization of existing SME loans [EUR 1bn] from ESIF Structural/Cohesion Funds Instruments under Structural and Cohesion Funds EU level instrument (contribution of Member State (MS) funds from Operational Programmes to centrally managed EU programs) Off-the shelf instruments Tailor-made instruments Significantly higher amounts than currently, but to be decided by each MS 20 Source: EC, adapted
EIB activities for SMEs: Past achievements and future products 0. Overview of EIB Group activities 1. EIB products for SMEs Key priority for EIB 2. EIB Group Deliveries to SMEs in Germany 3. New initiatives 4. Looking forward and conclusions 21
Looking forward Enhancing EIB Group support for SMEs Support continued availability of financing for SMEs through banking partners Maintain and improve impact of EIB finance on SME final beneficiaries - transfer of financial advantage, tenor of sub-lending Continued development of risk-sharing activities for innovative SMEs and wider ABS initiative for growth funding Respond to evolving EU policy priorities: youth employment, trade finance, etc. 2014 EIB lending to SMEs in the range of EUR 17.5 18.5 bn. Maintaining similar level of lendingin2015 and slightlylower in2016 Continue strengthening cooperation with the European Commission, Member States, national and multilateral development financing institutions, and also SME and banking associations 22
EIB Group Contact Details Jörn Thiessen Head of Berlin Office Gunnar Mai Head of CIP SME Guarantee Facility Phone: (+49) (0) 30 590047916 email: j.thiessen@eib.org Phone: (+352) 43 79 81358 email: g.mai@eif.org 23