He said that although all independent European firms with fewer than 250 employees are eligible for an EIB loan, the bank is still relatively unknown in EU countries.
Since the financial crisis broke, the EIB has ramped up its funding for small and medium-sized businesses in an effort to keep firms afloat during the credit crisis (EurActiv 13/02/09).
However, there have been claims that this funding stream has been ignored by some of the commercial banks with which the EIB has partnered (EurActiv 08/07/09).
"The few thousand enterprises which have benefited in one year from EIB loans are only a small fraction of the millions of SMEs which are on the European market," said Fontaine Vive.
Before the reforms presented to European finance ministers in September 2008, "just when the crisis began," the EIB had already loaned €5 billion in one year to SMEs. Indeed, the EIB Group has been financing SMEs since 1968, with its governors – the 27 finance ministers of the European Union – making doing so one of its five operational priorities in 2005.
In the wake of the crisis, the EIB developed a new lending formula to channel extra cash to SMEs. "In 2008, the EIB loaned €8.5 billion all over Europe via this new tool, and in 2009 we are close to €11 billion," Fontaine Vive said. The overall package adopted by the finance ministers amounts to €30 billion by 2011.
EIB loans for SMEs can support all types of investment or expenditure necessary to grow a small business. They are not directly offered by the EIB but are provided throughout the EU via commercial banks. "These are responsible for evaluating each loan application submitted by a SME," he explained.
For most operations, it is entirely up to the intermediary bank to decide whether or not to grant a loan to the SME. The EIB's participation serves to enhance the financial terms of such loans and the bank will ensure that the SMEs concerned are clearly informed of these favourable terms.
France, Italy and the United Kingdom are the countries most interested in these loans, according to the EIB vice-president. "We are looking for what we can do in Central Europe, as the crisis has been worst there," he added. By the end of the year, "the EIB will offer mezzanine products for high-growth SMEs," Fontaine Vive said.
Through its subsidiary, the European Investment Fund (EIF), the EIB will provide participating loans to increase high-growth SMEs' ability to obtain bank credit without necessarily having to open up their capital or provide substantial security.
"Some French commercial banks are interested in sharing risk with us on this new product," concluded Fontaine Vive.
To read the full interview in French, please click here
