First CIP loan guarantee agreement for businesses in Portugal

The European Investment Fund (EIF) and Fundo de Contragarantia Mútuo (FCGM), have signed the first CIP loan counter-guarantee agreement in Portugal to support Small and Medium-sized Enterprises (SMEs). This counter-guarantee with FCGM will indirectly allow banks in Portugal to substantially increase their lending volumes to businesses and will help to generate a new portfolio of loans worth up to EUR 200m over the next three years. Over 500 Portuguese companies are expected to benefit from this transaction.

This transaction under the Competitiveness and Innovation Programme (CIP) substantially increases FCGM’s counter-guarantee capacity allowing them to launch a new guarantee line enabling SMEs in Portugal to now have easier access to finance while benefiting from substantially reduced collateral requirements. The CIP guarantee allows FCGM to counter-guarantee the four mutual guarantee institutions of Portugal which will in turn guarantee loans provided by banks to SMEs.

Speaking at the signature ceremony close to Porto, EIF Head of Guarantees, Securitisation & Microfinance Alessandro Tappi said: “I am delighted to be signing our first agreement under the CIP Programme in Portugal with FCGM for the benefit of SMEs. Allowing banks via FCGM to increase lending will help entrepreneurs in Portugal to develop their businesses”.

José Figueiredo, CEO of SPGM, commented: “The new EIF credit line will allow up to 500 SMEs to be supported. Thanks to this agreement banks will get a guarantee up to 80% of loans for investment projects from the 4 Portuguese Mutual Guarantee Societies, which will get a counter-guarantee of 80%.”

About the EIF

EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance.  EIF designs and develops venture capital and guarantees 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. The EIF total net commitments to private equity funds amounted to over EUR 6.9bn at end 2012. With investments in over 435 funds, the 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. The EIF guarantees loan portfolio totalled over EUR 4.8bn in close to 255 operations at end 2012, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

About SPGM

SPGM is the oldest entity within the Portuguese Mutual Guarantee Scheme, which started activities in 1994 as if it were then a common Mutual Guarantee Society. Nowadays, thanks to the establishment of Mutual Guarantee Societies in the country, SPGM main role is the management of the Counter Guarantee Fund, a financial entity which covers part of the risk taken by the Mutual Guarantee Societies.

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).

Press contact:

• EIF: David Yormesor, tel : +352 42 66 88 346 , e-mail : d.yormesor@eif.org
• SPGM: Miguel Sousa Branca, tel.: +351 22 616 52 80, e-mail: jm.sousabranca@spgm.pt