Eur urop opean ean Inv nvestment estment Fun und Impro rovi ving ng SMEs Acc ccess s to Finan nance ce EESC 03 3 Jun une e 2015
Small and Medium-sized Enterprises (SMEs) key facts “ SMEs are major contributors to economic growth and job ” creation in Europe 99% 20 million 1 in 3 SMEs EUR 3.4 trl of businesses in SMEs in Europe of SME failed to obtain the Europe are SMEs totalling 86 million contribution to financing they jobs which equal the GDP* of the needed in 2013. 66.5% of all This is where EIF EU-28 European jobs steps in. *source: Annual Report on European SMEs 2012/2013 - European Commission – 2012 figure 2
What is the EIF? Section One 3
What is the EIF? “ We provide risk financing to stimulate entrepreneurship and ” innovation in Europe Making Offering Working Supporting finance more a large array of with financial the market in a accessible and targeted products intermediaries countercyclical helping SMEs to to support SMES across the EU-28 way innovate and ranging from venture EFTA countries, grow capital to guarantees candidate & and microfinance to potential candidate SMEs countries 4
A few facts about us “ We pursue EU policy objectives and ” financial sustainability Shareholders Assets AAA-rated Capital unique tripartite by three major under increase structure: 63.7% rating agencies management to EUR European investment Bank (EIB), 24.3% of EUR 14bn, 4.5bn European Commission mobilising over ensuring strong (EC), 12% 26 public & EUR 77bn with other capital base private financial market players institutions (FIs) 5
Our history “ We have designed and implemented financial solutions for SMEs for 20 years and so far supported more than 1.5 ” million SMEs 1994 2000 2004 2014 EIF’s role Founded and started EIB becomes EIF starts to by providing majority manage the first strengthened with guarantees to increased shareholder and SME focussed financial makes EIF the fund-of-funds on capacity allocated “SME risk finance intermediaries ; behalf of an EU by its shareholders specialist” in 1997 offer expands Member State for the benefit of to venture capital European SMEs 6
Our objectives “ To support smart, sustainable and inclusive growth for the benefit of ” European SMEs Be Fill Achieve Support Europe’s policy objectives innovation & the SME leading investor in and return on entrepreneurship financing capital venture and growth and bring together capital & a catalyst gap public and private to promote SME partners and leverage public lending & funds by attracting microfinance private capital 7
Helping businesses at every stage of their development Public Stock Markets Portfolio Guarantees & Credit Enhancement VC Funds, Lower mid market & Mezzanine Funds Social Impact Funds VC Seed & Early Stage Microcredit Business Angels, Technology Transfer PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT SME Development Stages HIGHER RISK LOWER RISK 8
A few key figures “ We are the prime provider of SME ” financing in Europe 500 venture and Equity * Guarantees & Microfinance * growth funds securitisation * 400 banks, guarantee 2014 commitments 2014 commitments: 2014 commitments: and promotional EUR 51m EUR 1.7bn EUR 1.6bn institutions which mobilised which mobilised which mobilised 1.5 m SME/midcaps EUR 135m EUR 8.2bn EUR 5.6bn supported EUR 14bn in total outstanding commitments mobilise over EUR 77bn *unaudited figures 9
Our counterparts “ We work with a wide range of ” counterparts to support SMEs Resources and Intermediaries Mandators and counterparts micro- European Investment Fund Managers Bank enterprises, Commercial Banks EIF own resources Development & SMEs European Commission Promotional Banks Member States/regions Guarantee Institutions and small Managing Authorities Leasing Companies mid-caps Corporates/private Corporates Public institutions Business Angels Other third parties Microfinance Institutions 10
Our resources “ We manage resources on behalf of a variety ” of stakeholders European European Commission National & Regional Investment Bank Funds CIP* allocated to equity Risk Capital 14 funds-of-funds and guarantees Resources (RCR) including in the Balkans, Risk-Sharing Instrument Germany, Poland, EIB Group Risk (RSI)/InnovFin Portugal, Spain, Turkey, Enhancement Progress Microfinance UK Mandate (EREM) SME initiative 14 Holding Funds Progress Microfinance WB EDIF** supported by struct. funds *CIP: Competitiveness and Innovation Framework Programme **WB EDIF: Western Balkans Enterprise Development & Innovation Facility 11
How do we help small and medium-sized enterprises? Section Two 12
Equity: Involved throughout the business cycle EIF Current Investment Technology Investing in Investing in Focus Mezzanine Transfer VC funds Growth Capital Technology Transfer Early Expansion/ Proof of Concept Lower Stage Development Business Angels Mid-Market Business Angels Capital/Lower Mid-Market Seed Stage Strategic Challenges Provide instruments to Support VC Catalyse hybrid Fill funding gap left stimulate ecosystem debt by institutional innovation, and decrease finance for growth investors competitiveness dependency and cross-border on public investment finance Business development 13
Guarantees: Encouraging SME lending by sharing risk “ We provide a wide range of products to increase our intermediaries’ lending ” capacity to SMEs We provide We protect “First loss” guarantees, risk sharing our financial intermediaries’ capital instruments and credit enhancement by sharing the risk they take when lending to SMEs SMEs benefit from reduced collateral requirements We make it easier Guarantees are often provided free of charge, which benefits for financial institutions to transfer SMEs credit risk to capital markets 14
Microfinance: Micro-enterprises are key to European economy “ By supporting micro-enterprises we promote job creation , entrepreneurship ” and social inclusion Improving Providing Committing the availability of finance financial (equity and to the EU 2020 for micro-entrepreneurs, guarantees) objectives of smart, the self-employed and sustainable and and non financial vulnerable social groups inclusive growth (Technical Assistance) who often lack access to instruments the commercial credit to increase microfinance market institutions’ funding capacity & sustainability 15
How do we cooperate with EU Member States & Regions? Section Four 16
How does EIF cooperate with EU Member States and regions? “ We foster SME development in EU ” Member States and regions Developing Encouraging Providing Transferring growth impartial know-how targeted financial particularly in less to regions and instruments for advice developed regions, helping develop EU Member that helps regional with the help of sustainable risk States, Accession and national revolving capital markets at Countries & authorities instruments the local level Regions manage their instead of grants resources 17
EIF-managed fund-of-funds and Holding Funds across Europe Fund-of-fund Activity UK FTF: GBP 200m BIF (LT,LV,EE): EUR100m ERP (DE): EUR 1000m DVI (NL): EUR 150m LFA-EIF (DE): EUR 50m PGFF (PL): EUR 90m NEOTEC (SP): EUR 183m MDD (GER) : EUR 200m PVCi (PT): EUR 111m WBEDIF (AL,BA,HR,MK,ME,RS,XK): EUR 145m iVCi (TR): EUR 160m Future initiatives LFF (LU): EUR 150m Holding Funds Supported by Structural Funds (JEREMIE) LITHUANIA: EUR 67.1m BULGARIA: EUR 349m ROMANIA: EUR 100m CALABRIA (I): EUR 45m MALTA: EUR 12m CAMPANIA (I): EUR 90m PACA (FR): EUR 20m CYPRUS: EUR 20m SLOVAKIA: EUR 100m EXTREMADURA (ES) : EUR 10m SICILY (I): EUR 60m GREECE: EUR 250m SICILY ESF (I): EUR 15m LANGUEDOC ROUSSILLON (FR): EUR 30m 18
Latest developments Section Five 19
The shape of EIF in 2014 and beyond “ Committing and mobilising resources ” to support 100 000 SMEs a year Resources Products Partners Intermediaries Target groups Funds-of-funds Funds EC COSME / Innovative Co-investment facilities Horizon 2020 Equity Full range of SMEs with national public equity spectrum Other bodies EIB Risk Capital Public co-investors / market promotional Resources players SMEs institutions Guarantees National & Regional Structural Funds Risk sharing Hold. Funds (Struc.Funds) Banks EIB Risk Erasmus, Mid-Caps Innovation Enhancement Other Public co-investors / Social Enterprise Mandate (EREM) promotional institutions FIs ABS* credit enhanc. Micro- EC COSME/Horizon SME initiative Guarantee institutions enterprises 2020 Guarantees MFIs Youth employment & Securitisation Microfinance *ABS: asset backed security 20
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