CIP guarantee in favour of KfW’s StartGeld Programme

The European Investment Fund (EIF), the European Union’s financial body for SMEs (small and medium-sized enterprises) and KfW, the largest promotional bank in Germany, have signed the first guarantee agreement under the European Union’s (EU) Competitiveness and Innovation Framework Programme (CIP) in Germany.

KfW redesigned its StartGeld programme in favour of start-ups and micro companies. The new product, which benefits from the EU guarantee, aims at encouraging German banks to extend small loans to start-ups, and offers favourable conditions to the target SMEs.

Commenting on the event EIF’s Chief Executive Mr. Pelly said “We are looking forward to this renewed collaboration with KfW in support of start-ups and hope that it will be another success story which will help the creation of thousands of small businesses in Germany.”  

Mr. Sickenberger, Director KfW, added: “The EIF guarantee makes the programme KfW-StartGeld much more attractive: it allows us to charge lower interest rates, and it enables us to provide a higher lending volume to founders of new businesses."

Background information:

The 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 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).

Under the SMEG, financial institutions are encouraged to enhance access to finance for SMEs. The facility offers an excellent tool to allocate additional financing volumes for those SMEs that would not otherwise have access to resources and financial engineering instruments 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 play an essential role in supporting sustainable job creation and entrepreneurship in European SMEs.

About EIF

The EIF central mission is to support Europe’s 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, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF commitment in guarantees totalled over EUR 11.6bn in some 190 operations at end August 2008, positioning it as a major European SME guarantees and securitisation actor and a leading micro-finance guarantor.

Since its activities began, the EIF has indirectly supported some 810,000 SMEs and has thus tremendously contributed to economic growth and development in Europe.

For further information, please contact Delphine Munro, d.munro@eif.org, or visit EIF’s website www.eif.org