EU launches SISI to boost SME funds
The European Commission, alongside the European Investment Bank (EIB) and the European Investment Fund (EIF), has launched the SME Initiative Securitisation Instrument (SISI), which will be available to all EU-based financial institutions.
The credit risk of securitised loans will be in part transferred to the SISI, which will make both regulatory and economic capital available for the originating financial institutions. SISI will combine the resources of member states, Horizon 2020 and of the EU Programme for the Competitiveness of Enterprises and SMEs (COSME). Resources from the EIB and the EIF, as well as any potential third party investors, will also be available.
An EU, EIF and EIB joint statement says: ‘The pooling of resources and the collective efforts to promote the instrument will allow more effective risk-sharing and capital relief for the ultimate benefit of SMEs and small mid-caps. Small mid-caps can also be eligible whenever Horizon 2020 resources are deployed.’
Created by amendments in the InnovFin and COSME delegation agreements that were signed at the Innovative Enterprise Conference in The Hague, the Netherlands, last week, SISI completes an existing SME initiative deployed in Spain, Malta and more recently Bulgaria.
The Innovative Enterprise Conference was regarded as a strategic occasion at which the EIB and the European Commission could present a joint report on financial accessibility for key enabling technologies (KETs) companies. The report concluded that financial risk-sharing products that support lending will not be enough. It also suggests that awareness and advice are the necessary components to producing ‘investor-ready’ companies.
