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SME Guarantee Facility Conference

Date: 29/04/2005

The European Investment Fund (EIF) hosted the second SME Guarantee Facility Conference that took place in Luxembourg on 28th April 2005. The SME Guarantee Facility is a mandate operated by EIF on behalf of the European Commission, which supports access to finance for SMEs by means of guarantees for SME debt financing.

The SME Guarantee Facility falls under the Multi Annual Programme 2001-2005 (now extended until 2006) and provides for three financial windows, namely, Loan Guarantees, designed to support enterprises of up to 100 employees with high growth potential by facilitating access to financing; Micro Credit, aimed at encouraging lending by financial intermediaries to micro-enterprises; and Equity Guarantees, that provide counter -guarantees of eligible guarantee schemes to cover equity investments in SMEs.

Attending the conference were representatives from almost all 39 participating Financial Intermediaries who cover twenty-seven countries, including the New Member States and the Accession countries.

David McGlue, Director of the Commission's Directorate General for Financial and Economic Affairs, Luxembourg, who chaired the conference, praised the Financial Intermediaries' successful implementation of the Facility, which has generated a total guarantee volume of EUR 2,703m, corresponding to EUR 5,100m of financing supported that had led to almost 250,000 loans guaranteed.

McGlue said: The[se] numbers mean that employment is supported by means of this Facility. An increase in staff numbers for a given SME from year to year does show that the SME investment, which created some extra jobs, was a sound decision and if the SME Guarantee Facility contributed to financing that investment, then it was part of the multi-factor process that led to these extra jobs.

McGlue also noted that the SME Guarantee Facility had proved to be effective in following market needs and was able to tailor its products to the specific market conditions in each country.

A successor scheme to the SME Guarantee Facility is currently under negotiation and is foreseen to be implemented in 2007 under the Competitiveness and Innovation Framework Programme 2007-2013 (CIP). The CIP will see the continuation of the Loan and Micro-credit Guarantee windows and as a new feature, will include a window for the Securitisation of bank loan portfolios.

Christa Karis, responsible at EIF for the implementation of the Commission's guarantee programmes said, This event was a great success as it gave all participants the opportunity to share their experiences and success stories. The efforts made by the EIF intermediaries in implementing the Facility throughout Europe are paying off and we are hopefully paving the way for a new success under the CIP programme.

View all conference documentation below: