The European Funding Financial institution (EIB) plans to mobilise round €50 billion of financing within the first half of the 12 months to assist SMEs via the brand new assure fund created to take care of the implications of the pandemic.
By the top of 2020, €5.4 billion of financing from this fund had been accepted, which was agreed in April final 12 months by the European Union (EU) states as a part of the emergency measures package deal within the face of the financial disaster brought on by the pandemic, however which solely began within the Autumn.
“It took a while to get it up and working, however on the finish of the 12 months we had about 6 billion Euros. We count on about 50 billion Euros within the subsequent six months and that is rising in a short time and effectively”, stated the president of the EIB, Werner Hoyer, at a press convention to current the annual outcomes of the EU public financial institution.
The fund operates with €25 billion in ensures supplied by EU international locations, permitting the EIB to finance Small and Medium Enterprises (SMEs) or mid-cap firms in difficulties as a consequence of covid-19, both straight or via intermediaries, reminiscent of funds from funding banks or nationwide promotion banks.
The EIB’s aim is to draw extra financing from personal sources with a view to mobilszing a complete of 200 billion Euros.
The financial institution predicts that 20 % of this funding will probably be in type of capital or fairness, as it’s estimated that European SMEs will face a capital deficit of 720 billion Euros because of the pandemic, defined Alain Godard, govt director of the European Fund Funding Financial institution, the arm of the EIB group for SMEs.
Following the liquidity issues skilled firstly of the pandemic, many firms, and specifically SMEs, will go into liquidation, stated the official.
Because of the pandemic, the group elevated funding to SMEs by 5,000 million Euros in 2020, to 30,600 million Euros.