The European Investment Bank (EIB) said Tuesday that it is broadening its support for small- and medium-sized enterprises (SMEs).
The EIB will make its funding mechanisms simpler, more transparent and more targeted to the individual needs of SMEs, EIB President Philippe Maystadt told reporters.
Maystadt presented the new approach at an annual meeting of the EIB's board of governors in Luxembourg, one day after the bank celebrated its 50th anniversary and inaugurated its new headquarters in the city.
The idea is to broaden the kinds of financial support on offer while tailoring them more specifically to local conditions and particular companies' needs.
The EIB's Global Loans -- credit provided to commercial banks that pass the funding on to individual businesses -- will be modernized to cut red tape for both the banks and the SME borrowers.
In return, the EIB will require banks to make very clear to their customers that they are benefiting from EIB funding, and to pass the advantages of that funding on to the borrower.
The EIB will also broaden its support beyond the traditional focus on fixed assets to finance "intangible" aspects of a firm's growth, such as research and development.
"It is clear that the market alone is unable to provide sufficient and appropriately priced finance for SMEs, in particular for high-growth, innovative businesses," said Maystadt in a statement.
"The EIB Group will seek to address gaps in the market by broadening the scope of its financing," Maystadt added.
Further details of the new measures will be announced later this year, said the EIB.
The SME sector accounts for 99 percent of European Union enterprises, providing over 100 million jobs.
More than 160,000 SMEs -- independent companies that have fewer than 250 employees -- benefited from EIB support in 2007.
The EIB made available 5 billion euros (7.8 billion U.S. dollars) last year for medium- and long-term credit lines for SMEs, while the European Investment Fund, which is controlled by the EIB, provided 1.4 billion euros (2.2 billion dollars) in guarantees and521 million euros (813 million dollars) in venture capital funds.
Source:Xinhua
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