1. TITOLO PROVVISORIO DELLA SLIDE DI PORTAFUTURO
SME INITIATIVE
20 NOVEMBRE 2015
Bucharest - July 11, 2017

2. 1. SME INITIATIVE REGULATORY FRAMEWORK SME GUARANTEE FACILITY (COSME)
Pursuant to article 39 of EU Reg. No. 1303/2013 Member States may use the ERDF and the EAFRD to provide a financial contribution to financial instruments indirectly managed by the European Commission with implementation tasks conferred on the EIB (or EIF).
SME GUARANTEE FACILITY (COSME)
HORIZON 2020 (Innovation)
SF ESTABLISHED
BY EC
SME INITIATIVE

3. 2. WHAT IS THE SME INITIATIVE?
The SME Initiative is a joint financial instrument of the EC and the EIB Group (the European Investment Bank and European Investment Fund) which aims to provide a financial contribution to such financial instruments managed indirectly by the European Commission for stimulating SME financing by providing partial risk cover for SME loan portfolios of originating financial institutions.
PROVIDES CAPITAL RELIEF TO BANKS, ATTRACTING PRIVATE SECTOR CAPITAL MARKET INVESTMENTS IN SMES, LEVERAGING PUBLIC FUNDS, AND REDUCING MARKET FRAGMENTATIONS
Member States, may voluntarily allocate up to 7% of his national ESIF allocations, included in a special dedicated National Operational Programme (NOP), managed by the EIF.

4. 3. ACCESS
Member States can express to the European Commission their interest to join the SME Initiative.
DEDICATED OP
FUNDING AGREEMENT
AD HOC
APPROVED BY EC
ANNOUNCEMENT
IT ESTABLISHES TERMS AND CONDITIONS, INVESTMENT STRATEGY, BUSINESS PLAN, EXPECTED RESULTS, REVIEW PROCEDURE, REQUESTS FOR PAYMENT AND MANAGEMENT COSTS.
MAX 7% ERFD/EAFRD FUNDS
EUROPEAN INVESTMENT
FUND
BANKS SELECTION

5. NEW LOANS TO SMEs ON FAVOURABLE TERMS
4. HOW THE SME INITIATIVE WORKS
The SME Initiative provides partial coverage of the credit risk of financial intermediaries for the SME loan portfolios.
BANK
LOANS PORTFOLIO
SME INITIATIVE
CREDIT RISK
REGULATORY CAPITAL
REGULATORY CAPITAL
RISK SHARING
NEW LOANS TO SMEs ON FAVOURABLE TERMS

6. 5. STRENGTHS
SME initiative does not require co-financing with national funds saving National Budget funds for other uses, unlike the other structural fund products, where Member States must co-finance a percentage of the eligible expenditures
SME initiative builds on an existing framework that allows to act fast and have significant impact: no need additional ex-ante assessment and is base on a standardized funding agreement
Facilitating the re-opening of the SME securitisation market, allows banks to diversify their sources of funding
Provides liquidity and capital relief to the banks (with strict conditionality to engage in new SME lending) and covers part of loan losses

7. OPTION 2 – SECURITIZATION OF EXISTING LOAN PORTAFOLIOS
7. MAIN FEATURES 1/3
MANAGING AUTHORITY
MiSE – DGIAI
GEOGRAPHICAL AREA
BUDGET
FUNDS (d)NOP
LESS-DEVELOPED REGIONS
SME INITIATIVE ITALY
102,5 mln NOP I&C
Campania
Puglia
Calabria
Basilicata
Sicilia
OTHER FUNDS
Max 4 mln COSME
100 mln FSC
TRANSITION REGIONS
FINANCIAL INSTRUMENT
Sardegna
Abruzzo
Molise
OPTION 2 – SECURITIZATION OF EXISTING LOAN PORTAFOLIOS

8. 7. MAIN FEATURES 2/3
Italy is the first MS to implement the securitisation of existing portfolios (Option 2)
The resources made available, through the Ministry for Economic Development (Ministero per lo Sviluppo Economico – Direzione per gli Incentivi alle Imprese) as the Managing Authority, amount to EUR m, of which:
EUR m via the Dedicated Operational Programme (CCI IT16RFSM001); and
EUR 100 m of additional national funds.
Plus additional :
about EUR 4.25 m of resources from the COSME programme; and
up to EUR 1.5 bn of resources made available by EIB Group
The above resources will be used to deploy the securitisation instrument in Italy

9. 7. MAIN FEATURES 3/3 Securitised Portfolio :
existing debt finance (loans, leasing, guarantees) to SMEs and other enterprises with less than employees
SMEs portion of the Existing Portfolio to equal at least 80% of the same
at least 50%+1 of the Existing Portfolio located in the Southern regions
not supported by other EU/ESIF instruments (to avoid double financing)
Additional Portfolio :
new debt finance (loans, leasing, guarantees)
to SMEs located in the Southern regions
working capital may be financed in line with ESIF regulation
new loans may take the form of credit line facilities
COSME (or H2020) eligibility criteria must be respected for a proportion of the portfolio
Overall target volumes in terms of new debt finance to SMEs in the Southern regions :
6x on the MS funds used at securitisation level to cover the junior e lower mezzanine risk, plus
20x on the COSME funds used at securitisation level to cover the middle mezzanine risk
“Hard cash” penalty: if Additional Portfolio < amount of MS contribution used at securitisation level
Other penalties: linked to transfer of benefit and COSME contribution

10. 8. HOW SME INITIATIVE ITALY WORKS
Securitization of existing loans portfolio
Commitment to provide, within 3 years, a new loan portfolio
BANK/
FINANCIAL INTERMEDIARY
Existing loans SME and MID-CAP portfolio
New loans to ‘’Mezzogiorno’’
SMEs portfolio
Amount at least equal to 6x the amount of
Member State contribution
POSSIBLE EIB
INTERVENTION
Tranche senior
IEF
Upper mezzanine
Middle mezzanine
COSME
Lower mezzanine
SME INITIATIVE ITALY
Tranche junior
Originator retention

11. 9. EXPECTED RESULTS
With a total of funding of EUR M, the SME Initiative NOP and the commitment of selected intermediaries to disburse new loans for a multiple of at least 6 compared to the dedicated NOP resources posed to guarantee first losses of existing securitized loan portfolios, the expected volume of new loans to the South SMEs amounted to approximately EUR 1.2 billion in 3 years.
The securitized portfolio shall be partially composed by loans guaranteed by credit consortia. This will allow the release of the regulatory capital managed by the credit consortia and not only by banks, thus leading to an increased number of new guarantees issued by the credit consortia.

12. 10. Main steps First application received by EIF in June 2017
30 November 2015
Approval by the EC of the Dedicated OP
01 August 2016
Signature of the Funding Agreement between EIF and the MA
17 October 2016
Signature of the Intercreditor Agreement between MA, Commission (DG GROW), EIF, EIB
21 October 2016
Publication of the Call for Expression of Interest
30 September 2017
Deadline for applicaiton under the Call
31 December 2020
End of the Disbursement Period for Additional Portfolios
First application received by EIF in June 2017

13. Information and contacts:
THANK YOU
for your attention
Information and contacts: