Investment Plan for Europe: EUR 230 million for Greek businesses as EIF and Eurobank sign new guarantee agreements
The European Investment Fund (EIF) and Eurobank Ergasias (Eurobank) have signed two guarantee agreements worth in total EUR 230 million to enhance access to finance for small and medium-sized enterprises (SMEs) in Greece. These agreements benefit from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe. This is the largest amount of funding channelled to Greece under the Investment Plan for Europe so far.
The new COSME agreement will allow Eurobank to provide EUR 130 million of loans to over 1,000 small businesses in Greece over three years. EIF will provide Eurobank with a guarantee under the COSME programme backed by the European Commission, allowing the bank to substantially reduce its collateral requirements.
Under the new InnovFin agreement, Eurobank will provide loans and leases at favourable terms to innovative SMEs and mid-caps for two years. EIF’s guarantee is provided under the “EU InnovFin finance for Innovators” initiative with the financial backing under Horizon 2020, the EU Framework Programme for Research and Innovation. The EU’s support for innovative Greek companies under this transaction is expected to generate a portfolio of EUR 100 million of loans and leases.
In addition, EIF signed an EaSI microfinance guarantee transaction with Eurobank, supporting EUR 1.1 million of loans to micro-borrowers who have difficulties in accessing credit across the Attika region via a dedicated microfinance product. The EaSI Guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund.
European Commissioner, Dimitris Avramopoulos, responsible for Migration, Home Affairs and Citizenship, said: “The European Commission continues to stand by Greece and the Greek people to cope with the economic and migration crises. Today, the agreement signed between Eurobank and the European Investment Fund is one more tangible example. We are helping small companies, the backbone of the Greek economy, to get access to this new source of financing. This is a big opportunity for Greek small and medium-sized businesses and especially for young and innovative entrepreneurs. The Juncker Plan is making a concrete difference on the ground for Greek businesses, entrepreneurs and employees.”
Speaking at the signing event in Athens, EIF Chief Executive, Pier Luigi Gilibert, commented: “Today’s EFSI signatures with Eurobank confirm EIF’s commitment to Greek businesses. Access to finance for smaller entrepreneurs will be enhanced by the COSME and EaSI guarantees, and the InnovFin transaction will help innovative companies to develop new products and services. I am pleased that these EU agreements will deliver EUR 230 million of new financing to local companies.”
Fokion Karavias, Chief Executive Officer of Eurobank, said: “Financing small and medium – sized Greek businesses is a critical challenge for the Greek Economy in its path to recovery. This agreement with EIF, which comes on top of several other initiatives involving major international partners, will allow us to support over 1,000 small businesses in Greece in the first stage, a number we aim to significantly increase in the future. Providing access to financing at a reasonable pricing to Greek SMEs is our prime target and a strategic priority for Eurobank”.
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. More information on EIF's work under the EFSI is available here.
Eurobank group is a dynamic banking group active in eight countries, with total assets of EUR 72.9 billion and c. 17.000 employees. With a total network of over 970 branches in Greece and abroad, the Group offers a comprehensive range of financial products and services to its retail and corporate customers.
In Greece, Eurobank is one of the four pillars of the banking system. With two distinct retail branch networks, the Eurobank Network and the New TT Branch Network, business specialized centers, a dedicated private banking network and electronic service channels, the Group’s philosophy focuses on high quality services to its clientele. The Group also holds a strategic position in retail and business banking in Bulgaria, Romania and Serbia, offers distinguished Wealth Management services in Cyprus, Luxembourg and London and is also present in Ukraine.
About the Investment Plan for Europe
The Investment Plan focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment project. The Investment Plan is already showing results. The European Investment Bank (EIB) estimates that by October 2016, the European Fund for Strategic Investments (EFSI) had potentially triggered more than EUR 138 billion of investment in Europe.
Building on this success, the European Commission on 14 September 2016 proposed extending the EFSI by increasing its firepower and duration as well as reinforcing its strengths. Find the latest EFSI figures including a break-down by sector and by country here. For more information see the FAQs.
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 will be devoted to easing 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. This facility also includes securitisation of SME debt finance portfolios. The COSME programme also invests through the COSME Equity Facility for Growth in equity funds that provide risk capital to SMEs mainly in the expansion and growth stages. The COSME programme builds on the success of the Competitiveness and Innovation Framework Programme (CIP) (2007-2013) which helped to mobilise almost EUR 21 billion of loans and more than EUR 3 billion of venture capital to over 384,000 SMEs in Europe.
Businesses can contact selected financial institutions in their country to access EU financing: http://www.access2finance.eu/.
The InnovFin SME Guarantee Facility provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by EIF against a proportion of their losses incurred on the debt financing covered under the facility.
About the Programme for Employment and Social Innovation (EaSI)
The European Commission’s Programme for Employment and Social Innovation ("EaSI") aims at supporting the EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The EaSI Guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund.
It provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance for vulnerable groups who want to set up or develop their business and micro-enterprises, through notably loans of up to EUR 25 000. In addition, for the first time, the European Commission is helping social enterprises through investments of up to EUR 500 000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI Guarantee, which enables financial intermediaries to reach out to micro-entrepreneurs and social enterprises that would not have been able to gain finance otherwise due to risk considerations.
Furthermore, the Commission is reinforcing the social dimension of the EFSI for both microfinance and social entrepreneurship. Overall, the total amount of support to these areas is expected to increase (from EUR 193 million under the EaSI programme) to about EUR 1 billion, mobilising some EUR 3 billion in additional investment.