EIF supports first online SME public securitisation transaction in Europe

The European Investment Fund, part of the European Investment Bank Group, and Germany’s KfW Group, support small businesses in the UK through the securitisation of Funding Circle loans.

This transaction is the first of its kind across Europe, opening up small business lending as an asset class to an even wider range of investors. It represents an alternative and complementary financial instrument that can be used to increase lending to small businesses in the real economy and reduces their dependency on bank lending, as recommended by the Bank of England and the European Central Bank.

George Passaris, ‎Head of Securitisation at the European Investment Fund said: “Small businesses across the UK will benefit from the European Investment Fund’s significant new support for Funding Circle, one of the UK’s largest peer-to-peer platforms. The EIF is pleased to work alongside KfW on the first securitisation transaction in Europe to support alternative financing of SME’s that will help Funding Circle provide more loans to small and medium-sized businesses.  This new engagement demonstrates the European Investment Fund’s firm commitment to help companies across Europe and across the UK to expand, create jobs and explore new opportunities.”

Rita Geyermann, Head of Asset Management at KfW said: “Investing in securitisation transactions backed by SME exposures in Europe has become one of our promotional objectives in order to support the availability of finance to SMEs. By investing in this innovative transaction in cooperation with the EIF, we are convinced we can stimulate SME lending via capital markets in the UK.”

Sachin Patel, Global Co-Head of Capital Markets at Funding Circle said: “This landmark transaction is the first of its kind. The investment by KfW, with the support of the EIF, marks the next step in our journey to open up a traditional fixed income asset class to new types of investors for the first time. We’re committed to building the infrastructure where any investor, big or small, can lend to small businesses across the world.”

To date, Funding Circle has facilitated $2.2 billion of lending to businesses across the world, and the marketplace is one of the largest net lenders to small businesses in the UK.

About the European Investment Fund

The European Investment Fund's (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. EIF designs and develops both 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.

About Funding Circle

Funding Circle(www.fundingcircle.com) is the world’s leading online marketplace for business loans, matching small businesses who want to borrow with investors who want to lend in the UK, US and Europe. Since launching in 2010, investors at Funding Circle - including 50,000 individuals, financial institutions and the UK Government - have now invested more than $2.2 billion in 15,000 businesses. Funding Circle was the first marketplace to announce a formal referral partnership with Santander, one of the UK’s leading high street banks, and has since announced a similar partnership with RBS. It has raised $273m in equity capital from the same investors that backed Facebook, Twitter and Airbnb.

About KfW

KfW is one of the world’s leading promotional banks. With its decades of experience, KfW is committed to improving economic, social and ecological living conditions all around the world on behalf of the Federal Republic of Germany and the federal states. One focus of its work is the financing of SMEs.

Press contacts:

EIF: David Yormesor
Tel.: +352 42 66 88 346, e-mail: d.yormesor@eif.org   

Funding Circle: Natasha Jones
Tel.: +44 203 667 2211, e-mail: natasha.jones@fundingcircle.com

KfW: Nathalie Cahn
Tel.: + 49 69 7431 2098, e-mail: Nathalie.Cahn@kfw.de