EU, Netherlands launch two new SME funds
The Innovative Enterprise Conference in The Hague, the Netherlands, has witnessed the launch of two new funds to help strengthen SMEs.
The SME Initiative Securitisation Instrument (SISI) was launched by the European Commission, European Investment Fund (EIF) and European Investment Bank (EIB) and is intended to enable more lending to SMEs and small midcaps.
“The European Fund for Strategic Investments and Horizon 2020 are contributing a great deal to strengthening SMEs. Today we are adding a string to our bow: we are freeing up capital to create more SMEs by launching SISI,” said innovation commissioner Carlos Moedas.
Securitisation is the process where a financial instrument is created, typically by a lender such as a bank, by pooling assets (for example SME-loans) for investors to purchase. The SISI is expected to stimulate economic growth and counter fragmentation of the internal market when it comes to access to credit by SMEs, as banks’ liquidity will be increased and new capital for lending will become available.
The EIF will implement the instrument through securitisations in the form of guarantees as well as by the purchasing of securitisation notes. In return for the credit risk protection on the securitised portfolios provided by the EIF, the banks will originate new debt finance to SMEs and small mid-caps at advantageous terms.
The SISI is to combine resources of the participating member states, including European Structural and Investment Funds, Horizon 2020 resources, and COSME, plus EIB and EIF resources. The pooling of resources and the collective efforts to promote the instrument are intended to allow more effective risk sharing and capital relief for the ultimate benefit of SMEs and small mid-caps, where relevant.
Dutch economic affairs minister Henk Kamp, who opened the conference, meanwhile announced the launch of a second venture and growth capital ‘fund-of-funds’ for SMEs in the Netherlands. The Dutch Venture Initiative II (DVI-II) will invest in funds investing in fast growing and/or innovative companies, following on from its successful predecessor, DVI-I. It will target companies in sectors such as ICT, clean-tech, med-tech, renewable energy and life sciences through primary investments in Dutch-oriented venture capital funds.
Moedas added that the European Commission is itself working on a pan-European fund-of-funds to also enable venture capital.
