Spain: EUR 4bn loans for SMEs as EIF signs guarantee agreements with six banks

The European Investment Fund, part of the European Investment Bank Group, and six Spanish banks have signed the first SME Initiative transactions in Europe, in the presence of the Secretary of State Marta Fernández Currás. The guarantee agreements signed today between the EIF and Bankia, Banco Santander, CaixaBank, Banco Sabadell, Banco Popular Español, and Bankinter will allow the six banks to provide EUR 4 billion of new loans to SMEs in Spain, over the next two years.

The agreements with the six banks aim to facilitate access to finance for Spanish SMEs by providing a 50% guarantee on each loan and by lowering the interest rates charged by banks. These transactions are expected to benefit up to 40,000 SMEs and start-ups in need of finance. Spain was the first country to implement this new joint EU initiative, committing to contribute an amount of EUR 800 million out of its European Structural and Investment Funds (ESIF).

The SME Initiative is a joint financial instrument of the European Commission, EIB Group and Member States which aims at stimulating SME financing by providing partial risk cover for SME loan portfolios originated by financial entities. Alongside ESIF resources contributed by Member States, the SME Initiative is co-funded by the European Union through Horizon 2020 and/or COSME resources as well as EIB Group resources.

EIB Vice-President, Román Escolano said: “I am pleased to be supporting the first signatures with banks in Europe under the SME Initiative. Working with our long-term partners, I am convinced that together we will be able to reach out to many Spanish SMEs in need of finance. The EUR 4 billion of loans for Spanish SMEs are the result of an excellent collaboration between the EIB Group, Spanish authorities, EC and the banks.” 

EIF Chief Executive, Pier Luigi Gilibert added: “I am delighted to be signing the first transactions in Europe, just months following the signature of the SME Initiative agreement in Spain. EUR 4billion will provide significant support to businesses at a time when access to finance remains a key concern for many companies. The combination of European Structural and Investment Funds, EU Horizon 2020 and EIB Group resources enable EIF to support risk-sharing and provide capital relief to financial intermediaries for the ultimate benefit of SMEs in Spain.”

Corina Crețu, European Commissioner for Regional Policy noted: “In January, the Intercreditor and Funding Agreements for the SME Initiative in Spain were signed. In July, a first payment of EUR 456 million was approved for this programme by the European Commission, which was the first such payment EU-wide in 2014-20. Today, the SME Initiative's implementation in Spain reaches yet another step: the EIF signs guarantee agreements with six major Spanish banks, which will lead to leveraging EUR 4 billion of new loans to Spanish SMEs. I am happy to say that EUR 800 million of ERDF support is an important element in the funding and will make a real difference. Together with Horizon 2020 and EIB Group funding, these ESIF resources will contribute to innovation, internationalisation and enhanced competitiveness of Spanish SMEs."

The first six guarantee agreements under the SME Initiative in Spain entail a combined guarantee capacity of EUR 2 billion, out of which EUR 1.4 billion is provided by the EIB Group. The EUR 800 million contributed by the Kingdom of Spain and the regions concerned will be leveraged with commercial lending through a risk-sharing mechanism. This financial instrument will act as a catalyst for private investment and foster job creation.