EUROLEASE FORUM INCREASING SME ACCESS TO FINANCE Enrico Duranti General Manager Iccrea BancaImpresa 2

Contents 1. UE firms most pressing problems 2. The falling in lending volumes in the euro area (credit crunch) 3. The falling of lending volumes in Italy 4. ECB’s SME April 2013 Survey 5. The importance of leasing for SME finance 6. Financial instruments for RDI and Growth 3

LARGE FIRMS MOST PRESSING PROBLEMS 4

SMEs MOST PRESSING PROBLEMS 5

ECB SURVEY 6

SME Business Climate Index 7 The unbalances between the EU Member States that were firstly identified at the beginning of 2011 are still significant.

2. The falling in lending volume to firms in the euro area (credit crunch) 8

CREDIT CRUNCH: some drives 9 The persistence of restraining conditions On SUPPLY side effects of macroeconomic cycle on banks balance sheets borrowers’ credit worthiness the uncertainty about conditions for banks’ funding tighter capital ratios for banks (Basel 3) The persistence of weakness conditions On DEMAND side Quality and quantity of domestic demand weak future expectations fall in infratructure investments negative outlook of real-estate market low innovation investment rate increasing commercial risks and bankruptcies

Euro Area Banks lending to firms 10 Bank lending to firms (annual growth rate)

11 FACTORS AFFECTING BORROWING DEMAND

FACTORS AFFECTING BANKS ABILITY TO LEND 12

Euro Area Interest rates 13 Interest rate on new loans to firms (Only loans up to EUR 1 million to firms, percent per annum)

Euro SMEs Sources of external financing 14 (percentage of respondent SMEs having used the different financing sources)

3. The falling of lending volumes to firms in Italy 15

ACCESS TO FINANCE ACCORDING TO SIZE OF FIRM in ITALY 16 In recent months banks lending has been contracting at a similar pace among all sizes of firm. Banks loans to firms (12-month percentage change)

Italy vs Euro area Bank lending to firms and households (monthly data; 12-month percentage changes) 17

ACCESS TO FINANCE IN ITALY ACCORDING TO FIRM SIZE 18 Lending refusal rate

Credit Quality in Italy 19 Ratio of new bad debts to outstanding loans (per cent)

Highest Bankruptcies rate over a decade in Italy 20 Total number of business closures breaks the 100k mark in 2012

4.ECB recent SME Survey (April 2013) 21

ECB SURVEY SAMPLES BY COUNTRY 22

ECB SURVEY SAMPLES BY SIZE & INDUSTRY 23

ECB SURVEY SAMPLES BY OWNERSHIP 24

ECB’ SURVEY ACCESS TO FINANCE by COUNTRY 25

ECB SURVEY NEEDS OF FINANCING 26

ECB SURVEY AVAILABILITY OF FINANCING 27

5.The importance of leasing for SME finance 28

ECB’ SURVEY ACCESS TO FINANCE LEASING and FACTORING 29

LEASING AS FUNDAMENTAL PART OF THE FINANCING TOOL SET FOR SMEs 30 Sources of external financing of Euro area SMEs (percentage of respondents)

LEASING AS FUNDAMENTAL PART OF THE FINANCING TOOL SET FOR SMEs 31 SMEs’ Fixed Asset Investment sources of financing in 2010

32 Italian leasing penetration on medium-long term financing

6.Financial instruments for SMEs R&D, Innovation and Growth 33

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35 INNOVATION UNION SCOREBOARD 2013 Findings for member states

36 FINANCIAL INSTRUMENTS FOR R&D, INNOVATION AND GROWTH EU Financial Instruments Equity/risk capital: e.g. venture capital to SMEs with high growth potential or risk capital to infrastructure projects Guarantees to financial intermediaries which provide lending to e.g. infrastructure projects, SMEs Other risk-sharing arrangements with financial intermediaries in order to increase the leverage capacity of the EU funds or a combination of the above with other forms of EU financial assistance

Financial Instruments : SMEs & Innovation  SME Guarantees (SMEG)  : approx. EUR 300m of EU budget generated 9.4bn of lending  SMEs reached, volumes are increasing fast  Target of SMEs is attainable  Equity: High Growth and Innovation (GIF)  : so far, EUR 344m of EU resources generated EUR 1.9bn of total investment volume, amounts growing fast.  190 SMEs covered so far  Risk-Sharing Finance Facility (RSFF):  EUR 2bn of EU and EIB resources expected to generate over EUR 10bn of lending to RDI projects. By end 2011 approximately EUR 7.5bn of lending already signed and EUR 5bn disbursed to final beneficiaries. Dedicated RSI facility for SMEs.  European Progress Microfinance Facility (EPMF, est. 2010)  by 2020, the EU contribution of EUR 100m is expected to have generated EUR 500m of micro-loans.

allows EIB Group to provide up to € 10 billion of RSFF loans and guarantees FP7 Contribution: up to € 1 billion EIB Contribution: up to € 1 billion up to € 2 billion for Risk coverage for potential losses (non-repayment of RSFF loans by borrower/ beneficiary) for Research, Development & Innovation investments EU/EIB Risk-Sharing and mobilisation of RSFF Finance 38 RSFF FINANCE SCHEME Guarantees & Funding

39 FINANCIAL INSTRUMENTS FOR R&D, INNOVATION AND GROWTH RSFF signed loans for innovative technologies (Energy)

40 FINANCIAL INSTRUMENTS PROPOSALS FOR MFF

41 Goal: Improve access to Equity/ venture capital for companies investing in R&D and Innovation Focus: Early-stage capital; expansion/ growth capital provision also possible within limits Target group: Innovative companies (start-ups, SMEs) Implementation: intermediaries (funds) Implementation in conjunction with the "Equity facility for Growth" of COSME (focus: expansion and growth investments) and FIs proposed under the Structural/ Regional funds H2020: Equity Facility for Research & Innovation HORIZON 2020

42  Horizon 2020 (Industrial Leadership) “Access to risk finance” o€ million in current prices (net of administrative costs) for financial facilities supporting all sizes of companies and types of entity oAt least 1/3 (ca. € million) likely to be absorbed by SMEs and small midcaps  COSME – “Actions to improve SME access to finance” o € million in current prices o Equity Facility for Growth: € 690 million o Loan Guarantee Facility: € 746 million PROPOSED BUDGET

43 Goal: Improve access to debt finance for private companies and public entities investing in R&D and Innovation Two parts: 1. "RSFF II": Loan Guarantee Facility For broad Mid-sized and larger companies, research institutions, PPPs, stand- alone projects, single SMEs 2. "RSI II": Guarantee facility for SMEs and small midcaps For SMEs and small mid-caps investing in R&D and Innovation Guarantees for loans of EUR 150,000 or more within loan portfolios Implementation in conjunction with the "Loan Guarantee facility for SMEs" under COSME and FIs proposed under the Structural/Regional funds H2020: Loan and Guarantee facility

RSI FOCUS Eligible financing: portfolio of new loans and/or financial leases; to be originated within a two-year period by the selected intermediary Eligible debtors: SMEs (EC definition) and Small Mid-caps (< 500 employees); Operating in EU-27 and other RSFF eligible countries (Norway, Turkey…); and Innovative: invest in producing or developing innovative products, processes and/or services and where there is a risk of technological or industrial failure; or “innovative” SMEs/Small Mid-caps, i.e. satisfying at least one of a list of pre-defined criteria; “fast growing enterprises”, measured by employment or by turnover: annual increase > 20%

RSI Structure – Guarantee Level Risk covered by EIF as guarantor EIF as guarantor Loan 1 Loan 2Loan n Guarantee Fee Guarantee Risk retained by the FIs Financial Intermediary Beneficiaries SME 1 S. Mid-cap 1 SME n Guarantee Rate: 50% of losses incurred in each loan Min 20% economic exposure to be retained by FI throughout the loan life

46 7.Anything else for leasing?

CAN WE ENLARGE LEASING SOLUTIONS? Working capital financing needs (inventory items) Householdings leasing contracts (proxi for covered bonds) Innovations leasing (patents) Exports leasing (buyers credit) 47

CONCLUSIONS 1.Lack of public and private investments across Europe 2.Lack of borrowing demand 3.Deterioration of domestic business margins 4.Deterioration of companies credit quality 5.Increase banks assets deterioration 6.Increase banks capital requirements 7.Need of investments into research, innovation infrastructures 8.Needs of entrepreneurial spirit 48

Let’s employ our human and capital resources! Thank you for the attention! 49