New guarantee product, as EIF signs counter-guarantee agreement with Polfund under CIP

 

The EIF and Polfund (Fundusz Poreczen Kredytowych S.A.) have signed a counter-guarantee agreement under the Competitiveness and Innovation Framework Programme (CIP) helping to provide improved terms and increased volumes of guarantees offered by Polfund to support small and medium sized enterprises (SMEs) in Poland.

Small businesses in Poland can now access over PLN 200 m (EUR 49 m) of guarantees provided by Polfund, which will be in turn counter-guaranteed under the CIP, and will help to support new and existing Polish SMEs.

Thanks to the CIP agreement, Polfund, a Polish private guarantee fund, will be providing a new guarantee product to cover loans to start-ups, will increase the maximum guarantee rate it currently offers to 80% and will increase the maximum maturity on guarantees for investment and working capital loans, allowing entrepreneurs to benefit from longer repayment periods.  

Under the Multiannual Programme (MAP), CIP’s predecessor, the EIF already established a sound working relationship with Polfund. This new deal signals the EIF’s renewed commitment to creating, supporting and developing SMEs in Poland.

About CIP

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).

There has been a high demand for CIP support so far: To date, half of the total CIP budget available for the seven year programming period has already been committed. With today’s signature there are now 31 intermediaries in 15 countries participating in CIP and further demand is quite strong.

More than 120,000 loans have been provided to businesses across Europe so far, with the majority of these loans helping entrepreneurs to start new businesses. Over 110,000 SMEs have benefited from CIP support to date and over 60% have been able to carry out product and process innovation thanks to this funding.

Under the SMEG, financial institutions are encouraged to provide enhanced access to finance for SMEs.  The facility offers an excellent tool to allocate additional financing volumes for those riskier SMEs that would not otherwise have access to finance because of the increased lending risk entailed.  As such, the SMEG complements and broadens EIF’s own product offering.

The EU CIP SMEG Facility gives the EIF the opportunity to support sustainable job creation and entrepreneurship in European SMEs. 

About EIF

The EIF commitment in guarantees totalled over EUR 14.7bn in close to 160 operations at end 2010, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor. Press contacts: 

For further information on EIF, please contact David Yormesor, d.yormesor@eif.org