Irish Regions Office Website

February 25, 2009

EIB agrees credit aid to SMEs

Europe's beleagured small and medium-sized enterprises (SMEs) have received a shot in the arm as the EU's long-term lending institution, the European Investment Bank (EIB), announced that it would be providing this key sector of the economy with EUR30 billion in loans over the next three years.

The EIB is to use the conventional banking sector as the means to reach SMEs with much-needed credit while assuming half of the risk, thus reducing the capital requirements of lending institutions. Ireland's three largest retail banks are alredy known to have submitted applications totalling EUR100 million each. Investments in research, distribution and patents are among the credit uses being encouraged for these sums.

The EIB, which had its capital for 2009 increased from EUR50 billion to around EUR65 billion by EU finance ministers in December, had been asked by Member States to prioritise SMEs and consequently worked on devising new lending products. However, an initial attempt to establish a European Microfinance Fund has stalled having failed to attract sufficient funds from national governments due to what EIB President Philippe Maystadt described as ''a lack of solidarity''and an insistence on attaching strict conditions to the money to be lent.

www.eib.org/sme

Posted by iroronan at February 25, 2009 10:53 PM