EIF signs new guarantee agreement with four German banks under CIP

The EIF and four German promotional banks, have signed a guarantee agreement under the Competitiveness and Innovation Framework Programme (CIP) for the benefit of businesses in Germany.

Small and Medium sized Enterprises (SMEs) in Germany can now access EUR 235 million of finance provided by LfA, NRW.Bank, Investitionsbank Berlin and Investitionsbank des Landes Brandenburg under the new agreement.

Thanks to this deal, the four promotional banks can now provide support for lending worth up to EUR 1 million per businesses, to entrepreneurs in the local region.

The four promotional banks work with partner banks serving half of the total number of SMEs in Germany, allowing CIP finance to reach a larger number of entrepreneurs across the country. Businesses can use this finance for investments and also as working capital. 

This is the first guarantee agreement to be signed by the EIF and a consortium of banks in Germany and demonstrates the role that the EIF is playing in enhancing access to finance to SMEs across the European Union.

Background information:

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).

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.