The first agreement is a direct guarantee under the Competitiveness and Innovation Programme (CIP) programme allowing Vaekstfonden to provide a total of EUR 126m of subordinated loans to start-ups in Denmark.
A second, counter-guarantee transaction was signed under the European Progress Microfinance Facility (Progress Microfinance), initiated and funded by the European Commission and managed by the European Investment Fund. This is the first counter-guarantee agreement to be signed under Progress Microfinance in Europe. Following this agreement, Vaekstfonden will help banks to provide a total amount of up to EUR 2.7 million to micro-entrepreneurs across Denmark, with a strong focus on supporting entrepreneurs excluded from access to traditional banking services including start-ups.
Together, these agreements will provide easier access to finance to over 500 local enterprises through granting working capital or investment loans to start-up SMEs and established micro-enterprises. Vaekstfonden is the first institution in Denmark to receive support under these facilities.
Commenting on the agreement, EIF Head of Guarantees, Securitisation & Microfinance Alessandro Tappi, said: “I am delighted to be signing our first CIP Quasi-Equity and Progress Microfinance agreements in Denmark with Vaekstfonden.
At a time of tightening credit conditions and given the need for improving access to finance for businesses, this agreement with Vaekstfonden, one of our long term partners, will bring valuable benefits to entrepreneurs across the country”.
The transaction will allow Vaekstfonden to continue further develop its current lending activity to SMEs in Denmark.
CEO at Vaekstfonden, Christian Motzfeldt, said: “We currently finance more than 500 companies per year. Our transactions with the EIF will without doubt further strengthen our ability to assist Danish small and medium-sized enterprises in pursuing new development and growth“.
SMEs wishing to apply for loans under Progress Microfinance or CIP can directly contact Vaekstfonden‘s branches in Denmark.
About the European Progress Microfinance Facility
The European Progress Microfinance Facility (Progress Microfinance) provides guarantees and funded instruments to microfinance intermediaries. The initiative is established with EUR 205 million of funding from the European Commission and the European Investment Bank. Progress Microfinance aims to increase access to finance for micro-entrepreneurs, including the self-employed. It has a particular focus on, but is not restricted to, groups with limited access to the conventional credit market. Examples include female entrepreneurs, young entrepreneurs, entrepreneurs belonging to a minority group, entrepreneurs with a disability, sole traders etc. Loans less than EUR 25,000 are made available through selected intermediaries participating in the facility. Progress Microfinance does not provide direct financing to micro-entrepreneurs or individuals.
Vaekstfonden marks the 52nd transaction signed under Progress Microfinance since its inception in 2010. To date, commitments of over EUR 130 million under Progress Microfinance have been signed to benefit EU micro-borrowers. Countries where agreements have been signed to date include Austria, Belgium, Bulgaria, Cyprus, Denmark, France, Greece, Ireland, Italy, Lithuania, Poland, Portugal, Romania, Slovenia, Spain, The Netherlands and the UK.
For further information about this initiative please visit: www.ec.europa.eu/epmf
The Competitiveness and Innovation Framework Programme (CIP), which spans from 2007 to 2013, has been put in place to boost European productivity, innovation capacity and sustainable growth, whilst simultaneously addressing complementary environmental concerns.
Within the framework of the CIP, the European Investment Fund (EIF) has been allocated EUR 1.1bn to be split between venture capital – with the High Growth and Innovative SME Facility (GIF) - and guarantees – with the SME Guarantee Facility (SMEG).
The European Investment Fund's (EIF) central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 7.9bn at end 2013. With investments in over 435 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 5.6bn in over 300 operations at end 2013, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.About Vaekstfonden – the Danish Growth Fund
Vaekstfonden – the Danish Growth Fund – is a sovereign investment fund, which through the co-financing of high-risk and knowledge-based small and medium sized companies makes a significant contribution to innovation and growth in Denmark. Vaekstfonden has over the years deployed instruments and programs promoting the access to finance for growth and innovation in SMEs. The instruments are structured in close partnership with institutional investors, commercial banks and private funds. Since its foundation in 1992 the Danish Growth Fund has co-financed more than 5,000 companies. Today, companies co-financed by Vaekstfonden since 2001 have more than 33,000 employees.
For further information please visit: www.vf.dk
EIF: David Yormesor, firstname.lastname@example.org
Vaekstfonden: Peter Bruun, Head of Communications, E-mail: email@example.com, Phone: +45 40 81 35 46