1. Image courtesy of Crestock.com
EIB loans for SMEs : A welcome ray of light in the current economic gloom?
Image courtesy of Crestock.com

2. SMEs 99% of EU enterprises are SMEs
9 out these 10 SMEs are actually micro (less than 10 employees)
2 out of 3 private sector jobs in the EU are provided by SMEs !!
There are 20.7 million SMEs in Europe, yet in 2009 the EIB’s money reached less than one quarter of one percent of these.
Statistics courtesy of the EU Commission

3. Where’s the money? Mostly with the banks.
They are given up to 2 years to allocate it to SMEs – far too long!
Sometimes with the EIB – many loans not fully disbursed to the banks or not taken up by the banks after signing.
Some countries got more, but some actually less despite the increased lending package announced in 2008
But the EIB would have you believe that all the money got through. Website reporting is misleading

4. Global loans in the CEE – a spray & pray approach
Analysed a sample of 78% of all loans over in Cz, Hu, Pl, & Sk
The ‘poor cousins’ compared to their Western Europe partners. No strategy in the CEE
Only one tenth of one percent penetration for SMEs over 2 years! (not one as above)
No targeting of key sectors. Many GLs written specifically for larger Mid Caps
Money ending up in countries which it was not signed up for
Only 4 out of 30 loans analysed fully allocated to SMEs
Very small % benefits.

5. The Conclusion?
More pressure on banks needed, either via tighter covenants or policy to promote GLs better, allocate faster, allocate to targeted sectors & provide greater financial benefit. Provide more of what the SMEs want!
Penalise non compliance
Do more ‘non lending’ to help the sector. Guarantees, blending via grants etc…
Partner with state govt. agencies to promote & sell GLs
Accountability & transparency – report the real numbers !
Ultimately though – a good solution for the banks but what about the SMEs
BUT NOT A GOOD IDEA TO LET THE BANKS DICTATE WHERE THE MONEY GOES

6. What they said
“the EIB’s additional financial support will allow quick disbursements and contribute to the real economy” Philippe Maystadt, EIB president
"Thinking and acting ’small first’ is one of the more useful and impressive tools policymakers have in their hands to restore confidence" Andrea Benassi, Secretary General of UEAPME
“banks [are] being deceptive and obstructive in the roll out and administration of the EIB loans” Mark Fielding, Chief Executive of ISME (Irish SME Association)
"There is not much point in getting funds at a low rate of interest from the EIB and then passing it on to SMEs at a high rate. Or, in other cases, not passing it on at all and just shoring up balance sheets.” Mark Fielding again
“We need to be assured that this money will actually filter down to small businesses. The Government and the EIB must do much more to promote the availability of EIB funds.” John Wright, National Chairman of UK’s FSB (Federation of Small Business)

7. Can anything be done? Yes, request data from EIB on your region
Lobby EIB to report statistics on actual disbursements. Name & shame their results
Ask EIB to explain why funds are taking such a long time to reach beneficiaries
Advise you MEPs and local MPs of the results