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EIF and PMV lower interest rates on COVID-loans for Belgian SMEs

    Date: 18 October 2021
  • The European Investment Fund and Flemish promotional organisation PMV have signed a guarantee that will retroactively lower the interest rates on PMV’s ‘corona loans’ to Belgian SMEs.
  • The guarantee covers a portfolio of €110 million in loans by PMV, which is expected to benefit over 1.000 Belgian SMEs and entrepreneurs in total.
  • The operation is made possible thanks to the European Guarantee Fund, part of the €540 billion EU rescue package in response to the COVID-19 pandemic

Thanks to an EIF guarantee, PMV will be able to significantly lower the interest rates on a portfolio of €110 million of ‘corona loans’ awarded in 2021 to support Flemish businesses. The lower interest rates apply to ‘corona loans’ of over €150.000 to SMEs and self-employed entrepreneurs that were granted through PMV. Thanks to the EIF guarantee, PMV can lower the interest rates from 4,5% to 2%. For corona loans smaller than €150.000, the interest will also be lowered, from 3% to 2%, thanks to a compensation mechanism set up by the Flemish minister of the Economy, Hilde Crevits. The new interest rates are retroactive on all loans awarded as of January 1st 2021, and will continue to be in force until the end of this year, when the granting of corona loans will come to an end. So far, these lower interest rates will already benefit 242 Flemish entrepreneurs and SMEs. The guarantee operation is made possible by the European Guarantee Fund, set up in 2020 to assist European companies that have come under strain due to the COVID-19 pandemic.

For Flanders, the European Investment Bank and the European Investment Fund are important partners. It is crucial for our prosperity that entrepreneurs retain easy access to finance and that, complementary to the commercial offering, PMV can offer them interesting financial instruments - especially during and after the corona crisis. With the corona loan, a subordinated loan of 3 years, PMV created a tailor-made instrument to compensate the medium-term financing needs of our companies. On October 14th, already 638 corona loans had been approved, for a total of €206 million. Thanks to our collaboration with the EIF, we can now –retroactively even - offer a large part of these entrepreneurs an even more favourable interest rate on their loan.” said Flemish Minister of the Economy Hilde Crevits.

Roger Havenith, Deputy Chief Executive of the European Investment Fund, added: “Through the EGF we have been able to extend support in unprecedented intensity and volumes to help businesses all over Europe rebound from the economic fallout of the pandemic. The ability to rely on trusted partners like PMV is very important in this regard, allowing us to roll out risk-sharing financial instruments for the benefit of European entrepreneurs. This agreement will support PMV’s lending capacity, enhancing access to more flexible and attractive financing for Flemish SMEs, offering much needed breathing space as we collectively try to take a step forward and leave the crisis behind us.

Filip Lacquet, Groepsmanager bedrijfsfinanciering at PMV, is glad that they positively concluded the discussions with the EIF: “Already before the corona crisis, Europe was a valued partner for the PMV Group, with loan guarantees under COSME, Innovfin or via the CCS programme for the cultural sector, as well as joint investments in infrastructure projects and the corporate loan platform that PMV created for larger loans. This crisis has only strengthened our collaboration further, in this case to the benefit of Flemish SMEs and self-employed entrepreneurs. The interests on the corona loans, as well as capital repayments are only due as of the third year of the loan, which liberates more cash for the companies and gives them breathing room in these times of crisis and relaunch.”

EIB Group Vice-President Kris Peeters added: “SMEs took quite a hit during the corona crisis, which is why they deserve all available support, especially now that we seem to enjoy an economic relaunch. It is crucial that the Flemish entrepreneurial spirit is protected. Therefore I am glad that the EIB Group, and the European Investment Fund in particular, can contribute to extend a helping hand to Flemish SMEs. The guarantee and the interest rate abatement that flows from it give the concerned companies more oxygen. That is exactly why the EGF, the European Guarantee Fund, was created: helping companies to get back on their feet after the pandemic.”

Background Information:

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

PMV is the regional promotional institution that is shaping the future of the Flemish economy. PMV finances promising companies from their earliest beginnings, right up to their growth and internationalisation. PMV offers tailor-made financial solution to all entrepreneurs with a solid business plan and a strong management team, using capital, loans and guarantees. Together with, and for, the Flemish government and other partners, PMV implements projects that are important to prosperity and well-being in Flanders. PMV currently manages a portfolio of €1.35 billion.

Press contacts:

EIB Group: Tim Smit, +352 691 286423, t.smit@eib.org

PMV: Frank Kindt, +32 472 420790, frank.kindt@pmv.eu

Cabinet of Minister Crevits: Arne De Brabandere, +32 496 029889, arne.debrabandere@vlaanderen.be


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