Investment Fund PLAN EUROPEO DE RECONSTRUCCIN NEXT GENERATION EU - PowerPoint PPT Presentation

e ’ re the European W Investment Fund PLAN EUROPEO DE RECONSTRUCCIÓN «NEXT GENERATION EU» Oportunidades para la Región de Murcia WebinarsUE, 7 July 2020

2 We share Backed by the EU, our role is to improve small business access to finance across risk with Europe. We do this through equity and debt risk sharing solutions. FIs* We understand small businesses are a high risk lending proposition for financial intermediaries, we offer solutions that alleviate a portion of the risk. * Financial intermediaries include banks, leasing companies, micro finance institutions, funds, universities and other financial intermediaries able to lend.

Risk sharing with financial institutions 3 1 in 4* SMEs fail to access the financing they need We help improve the funding environment for small businesses by addressing financing gaps We deliver market driven SMEs experiencing significant problems in Factors adversely affecting access to finance solutions for lenders in finding suitable finance solutions, of any SMEs nature* 50% Hard to assess SMEs’ risk Information Sharing risk proposition asymmetry 40% 30% Due to capital adequacy Providing capital Scarcity of capital requirements relief 20% 10% Lack of sector specific Economic Underserved Building ecosystem financing and targeted environment sectors 0% financing terms FI SK NL DE AT FR BE EA IE ES PT IT GR Gap HY1/2019 Source: *The European Small Business Finance Outlook, the 2019 December edition of the EIF’s research paper covering state of small businesses’ access to finance in Europe

Guarantees explained 4 Our unique approach We design financial instruments that share risks with our partners multiplying public resources and increasing the supply of finance Our resources Our approach Our partners Small businesses • European Commission • European Investment Bank • Local authorities & National Promotional Institutions • Other investors* Equity 500+ More than Funds We design risk sharing €5 and deploy €1 Support financial investment EU policy instruments and lending to public goals small resources that target Foster long funding gaps Debt 500+ businesses term market Banks sustainability risk sharing 5x leverage of public resources** *Includes EIF’s own resources and other external resources including private investors. **On aggregate based on 2019 transactions. Depending on the instrument and the transaction, the leverage achieved can range from 4x to 40x. Source: EIF Annual Report 2019.

Risk sharing with financial institutions 5 Our statutes and ownership We have a unique status, policy and return objectives Own resources Public-private partnership AAA credit rating** Policy & return objective € 4.5bn * Supporting EU objectives while generating a return to Our Our preferred creditor our shareholders means we status allows a 0% risk shareholders operate a commercial Our capital base allows us to weighting to assets pricing policy and a balance invest and guarantee alongside guaranteed by the EIF are of fee and risk based our resource partners income *20% paid-in. **AAA-rated by three major rating agencies. EIF has a preferred creditor status. ("Multilateral Development Bank") allowing a 0% risk weighting to assets guaranteed by EIF.

Risk sharing with financial institutions 6 Our collective achievements so far Together with our partners we have financed more than 1.8m SMEs and mid-caps with EU backed guarantee instruments Committed so far (€) Leveraged ( €) 136.8bn 24.8bn Supporting Total over 320,000 SMEs Debt risk sharing and mid-caps with financial 2.8m intermediaries jobs 4.9bn 96.6bn EU backed capped portfolio guarantee 19.9bn 40.2bn EU backed uncapped portfolio guarantees Data as of 31/12/2019. Sources: EIF Dashboard Signatures: Net since inception and eif4smes.com. Numbers rounded.

Risk sharing with financial institutions 7 EC programmes helping businesses at every stage EC equity programmes EC guarantee programmes

Current guarantees available 8 Current EU backed guarantees available Differentiated loan terms to suit different client types Students, Micro Social High risk & high Cultural and Innovative adult learners enterprises enterprises growth SMEs creative sectors SMEs, small mid- EU mandates SMEs caps & mid-caps target clients Skills & EaSI EaSI COSME LGF CCS LGF INNOVFIN Education Pilot SMEG Students < 10 FTE < €30m turnover Client size <250 FTE N/A <3,000 FTE < €2m turnover SMEs Students < € 25K < € 500K < € 3m < € 2m < € 7.5m Loan size < € 30K Student financing Eligible financing** • Working capital • Tangible & intangible investments • M&A Training projects At the portfolio level. For more information on our mandates, please visit www.eif.org. ** In the form of senior and/or subordinate debt. Source: MM dashboards, data as at 31/12/2019.

Current guarantees available 9 Summary of key guarantee terms Differentiated terms addressing different market failures Students, Micro & social High risk & high Cultural and Innovative SMEs, adult learners, training enterprises growth SMEs creative sectors small mid-caps & EU mandates organisations EaSI COSME LGF SMEs mid-caps target clients Skills & CCS LGF INNOVFIN Education Pilot SMEG Capped Capped Capped Capped Uncapped Financial instruments portfolio guarantee portfolio guarantee portfolio guarantee portfolio guarantee portfolio guarantee Guarantee rate <80% < 80% < 50% < 70% < 50% Guarantee fee Free of charge Free of charge Free of charge Free of charge 0.5%-1.3%* Guarantee tenure 15 yrs 6/10 yrs 10 yrs 10 yrs 10 yrs New riskier product New riskier product Reduced cost of SME (e.g. collateral (e.g. collateral Tailored to each individual & small mid cap reduction, increased reduction, increased transaction (e.g. reduction in lending. Lending conditions Transfer of benefits maturities, start-up maturities, start-up collateral or increased Limit on the number financing) or substantial financing) or volumes) transactions with mid- increase in lending substantial increase in caps volumes lending volumes Microfinance FIs. Small Universities, vocational Type of financial Banks, Co-op banks, training centres, banks, ---- Banks, NPIs, leasing companies, guarantee institutions, debt funds ---- intermediary foundations, banks, funds, foundations NPIs * In the form of senior and/or subordinate debt

Current guarantees available 10 Summary of key guarantee terms Covid-19 enhancements Students, Micro & social High risk & high Cultural and creative Innovative SMEs, adult learners, enterprises growth SMEs sectors SMEs small mid-caps & EU mandates training organisations EaSI COSME LGF CCS LGF mid-caps target clients Skills & INNOVFIN Education Pilot SMEG Capped* Capped Capped Capped Uncapped Financial instruments portfolio guarantee portfolio guarantee portfolio guarantee portfolio guarantee portfolio guarantee Guarantee rate <80% < 80% < 50% < 70% < 50% Improved Covid-19 < 80% < 90% < 80% < 90% < 80% guarantee rate • Postponement, • Coverage of rescheduling or • capitalised interest Postponement, • Postponement, credit holiday allowed rescheduling or rescheduling or period explicitly • Increase of the credit holiday allowed (**) credit holiday period outstanding period covered (**) • covered (**) Coverage of • • Improved guarantee exposure per client Coverage of • Coverage of accrued accrued or terms for companies to EUR 50,000 / accrued or or capitalised interest capitalised interest investing in skills and EUR 1,000,000, capitalised interest extended up to 360 extended up to 360 Key enhancements education and with the individual extended up to 360 days(***) days(***) providers of transaction days(***) • • Extended roll-over Innovation • education remaining capped Extended roll-over period for revolving eligibility criteria at EUR period for revolving transactions more flexible 25,000/EUR transactions • • Increased cap rate Extended roll-over • 500,000 Increased cap rate ( **** ) period for • 1y extension of the ( **** ) revolving guarantee coverage transactions * In the form of senior and/or subordinate debt **Applied to existing or new transactions to be covered by the guarantee until the validity of the guarantee. *** provided that no default has been declared no acceleration instilled, this creating incentive for intermediaries to support repayment flexibility **** subject to EIF board approval

11 EaSI The Employment and Social Innovation financial instruments aim at increasing the availability Financial of and access to finance for vulnerable groups. The EaSI financial instruments Instruments comprise EaSI GFI (portfolio guarantee), EaSI funded and EaSI capacity building.