EIF and EIB sign "Preparatory Action" agreement

As part of the European Commission's Preparatory Action Support for SMEs in the New Financial Environment, EIF and EIB co-signed on 22 April the Delegation Agreement which will define implementation of the facility which aims to expand and reinforce the EU's SME credit markets, notably micro-lending, in the 10 new Member States.

The Preparatory Action's total current budget amounts to EUR 6 million. This is being divided into three EUR 2 million facilities with the EIB Group, the European Bank for Reconstruction and Development, and a joint agreement with the Council of Europe Development Bank and Kreditanstalt für Wiederaufbau.

EIF will manage the EIB Group's EUR 2 million contribution, destined to fund Technical Assistance to credit institutions which qualify for either an EIB global loan or an EIF guarantee.

This combined financial and technical approach targets, on the one hand, an improvement in the capacity of commercial banks and other credit institutions to extend loans, particularly micro-loans, to SMEs, and, on the other hand, the development of credit institutions' in-house administrative, assessment and monitoring abilities. Targeted are local, regional or cooperative financial institutions or banks of the new Member States.

This new mandate represents an interesting case of active cooperation with the Bank's Operations in the new Member States. It also highlights EIF's expertise in the field of technical assistance and advisory services gained since 2003 in the EU, and is in line with its role as a Multilateral Development Bank.

Francis Carpenter, Chief Executive of the European Investment Fund, commented, "This reinforcement of EIB Group's cooperation with the Commission is an excellent example of EIB and EIF combining their skills and experience for a common Community objective".