Fibank The European Investment Fund (EIF) and First Investment Bank (Fibank) signed the first Guarantee Agreement to support innovative research-oriented SMEs & small mid-cap companies.
The agreement is the 23rd such agreement in Europe within the framework of the Risk Sharing Initiative (RSI) and now the total financing available to the innovative research-oriented SMEs and small mid-cap companies in the EU exceeds 2 billion Euro.
The agreement is also applicable to funding small and mid-cap companies working in a framework under an initiative financed by the European Commission.
This new agreement within the framework of the RSI allows Fibank to provide innovation drivers in Bulgaria with additional loan financing of up to 15 million Euro under more favorable terms and conditions for the next two years by taking advantage of the 50% guarantee provided by the European Investment Find in Bulgaria. In other words, Fibank can now provide to eligible small and mediums-sized Bulgarian companies additional financing under more favorable terms.
Regarding this important event Mr. Vincent van Steensel , head of the RSI in the European Investment Fund said: "I am glad to sign with First investment Bank the first financial agreement in Bulgaria under the risk sharing instrument in support of small and medium businesses as a part of the Seventh Framework Programme (FP7) of the European Commission for scientific research and technological development. I am confident Fibank will quickly and successfully channel the much needed financial resources to a large number of companies all over the country."
Mr. Vassil Christov, Executive Director of Fibank offered the following comment: "The agreement signed today enables Fibank to provide additional loan financing to small and medium-sized companies all over the country. I would like to thank the European Investment Fund for the fruitful cooperation."
The purpose of the Risk Sharing Instrument is with the support of the EU to encourage banks to finance small and medium enterprises and mid-cap companies with less than 500 employees, which need financing for scientific research, development and innovation. The participating banks are selected by the European Investment Fund following a call for expression of interest to financial intermediaries all over Europe.
Information about the Risk Sharing Instrument under the Seventh Framework Programme (FP7)
The RSI is designed to encourage banks to extend loans of up to 7.5 million Euro to SMEs and medium-cap companies working in the fields of scientific research, development and innovation, which are looking for venture or working capital. This is a joint initiative of the European Investment Fund, the European Investment Bank and the European Commission. This initiative is implemented within the framework of the Seventh Framework Programme (FP7) of the EU and utilizes the risk absorption capacity of the European Investment Fund. RSI complements the scope of the Risk Sharing Finance Facility (RSFF), managed by the EIF/EIB.
By this instrument the European Investment Fund provides guarantees to banks and leasing companies providing loans and financial leases to SMEs and/or Small Mid-Cap companies. The guarantee covers up to 50% of the due amount in case of default under the loans. The pilot phase is expected to include about 25 banks all over Europe and this will enable the RSI to provide a financing of up to 2.5 billion Euro for innovative research-oriented SMEs and small mid-caps companies.
The call for expression of interest is open to financial and credit institutions based and operating in the EU member states and/or associated countries eligible under the FP7, such as Iceland, Liechtenstein, Norway, Switzerland, Israel, Turkey, Macedonia, Serbia, Albania, Montenegro, Bosnia and Herzegovina, Faroe Islands and Moldova.
Information about the European Investment Fund (EIF)
The primary mission of the fund is to support small and medium-sized enterprises (SMEs) across Europe by facilitating their access to financing. The EIF develops and offers financial schemes and products for startup and expanding companies by providing guarantees and instruments for micro financing tailored and targeted specifically for this market segment. In this capacity the EIF helps the achievement of the objectives of the EU, especially in the field of entrepreneurship, growth, innovation, R&D, employment and regional development. The total net commitment of the European Investment Fund to risk sharing funds exceeded 6.9 billion Euro by the end of 2012. With investments in over 435 finds the EIF has a leading role in Europe considering the size and the scope of its investments especially in the high-tech sectors and in startup companies. The portfolio of credit guarantees of the European Investment Fund amounted to 4.7 billion Euro in nearly 255 operations by the end of 2012, which positions it as the primary European market player in the field of guarantees for micro, small and medium businesses.