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Further EU support for Vækstfonden to boost Danish SMEs

  •  
    Date: 01 April 2020
  • EIF doubles existing guarantee facility for SME-investments by Danish National Promotional Institution Vækstfonden
  • Size of guaranteed portfolio of investments by Vækstfonden will rise to DKK 280m
  • Agreement supported under Juncker Plan’s European Fund for Strategic Investments

The European Investment Fund (EIF) has signed an agreement with the Danish national promotional institution (NPI) Vækstfonden in support of local SMEs. The EIF will double its existing guarantee for financing that targets SMEs, for which normal bank financing can be scarce. The EIF operation is supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe, or Juncker Plan.

On a technical level, thanks to a DKK 140m increase, today’s agreement will allow Vækstfonden guarantee DKK 280m (EUR 37.5) worth of its financing activity with the EIF under the European “COSME” initiative. Apart from targeting loans to farmers and loans to more risky SMEs, the deal will enable Vækstfonden to provide better access to finance for SMEs through a new loan product that involves crowdlending platforms. This constitutes the first COSME transaction supporting crowdlending; it will be encouraging the development and growth of the market for alternative and digital financial intermediation and thereby providing enhanced access to finance to Danish SMEs.

EIF Chief Executive Alain Godard commented: “After the recent financing agreement with the EIB, this guarantee will support Vækstfonden in generating more financing for those companies that need it most. The COSME instrument, supported under the European Fund for Strategic Investments, has been a great tool to allow the EIF to increase its guarantees throughout Europe, in support of ambitious entrepreneurs.

Rolf Kjærgaard, Director of Vækstfonden, stated: “One of our primary tasks is to secure venture capital for those companies that Denmark must value and support. Vækstfonden is helping to further expand funding opportunities, and crowdlending is a good path to capital, especially for smaller and new businesses.

Background Information:

Part of the European Investment Bank Group, the central objective of the EIF is to support the micro, small and medium-sized enterprises (SMEs) of Europe by helping them to access funding. The EIF designs and develops risk and growth capital, guarantees and micro-funding instruments that specifically target this market segment. In this role, the EIF encourages the EU's objectives of supporting innovation, research and development, entrepreneurship, growth and employment.

Vækstfonden, the Danish state’s investment fund, is an independent fund governed by an independent legal act and an independent board of directors. The act concerning Vækstfonden stipulates that the fund must promote growth and renewal for small and medium-sized enterprises in order to achieve a greater socio-economic return. The fund contributes to the creation of new companies by providing capital and expertise. Since 1992, Vækstfonden has co-financed growth in more than 7,900 companies with a total commitment of more than DKK 24,9 billion. Vækstfondenprovides loans and guarantees in collaboration with Danish financial institutions and European partners.

COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020 with a total budget of EUR 2.3 billion. At least 60% of the programme is devoted to improving access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. COSME Equity Facility for Growth helps provide risk capital to SMEs mainly in the expansion and growth stages.

About the European Investment Fund (EIF)

This agreement has been made possible thanks to the support of the European Fund for Strategic Investments (EFSI). The EFSI is the pillar of the Investment Plan for Europe, known as the Juncker Plan. Its support increases the EIB Group’s capacity to finance investment projects that, in line with the Juncker Plan’s criteria, fosters the EU competitiveness and create new jobs. The Juncker Plan focuses on boosting investment to generate jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.

The EFSI provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. The projects and agreements approved for financing under EFSI are currently expected to mobilise EUR 462.7 billion in investments. The Plan is currently supporting more than one million start-ups and SMEs in the 27 Member States. More information on the results of the Investment Plan for Europe is available here.

Press contacts:

European Investment Bank:
Tim Smit,t.smit@eib.org, Mobile:  +352 691 28 64 23
Website: www.eib.org/press - Press Office: +352 4379 21000 – press@eib.org

Vaekstfonden: Nathali Selmeczi Lehmann, +45 28 60 01 13, nsl@vf.dk

European Commission: Siobhan Millbright, +32 (0) 229 57361,siobhan.millbright@ec.europa.eu

 

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