The European Investment Bank Group (EIB Group) plays a crucial role in helping small businesses and medium-sized companies access the funding they need.
This evaluation explores how the EIB Group strategic financial support can empower small and mid-sized businesses, drive innovation, and contribute to a sustainable and resilient economy.
The report indicates that although the EIB Group has diversified its approach to supporting these businesses, it still requires clearer objectives and better data management.
The evaluation provides recommendations to improve the effectiveness and impact of the Group’s support.
About the report
The evaluation examines the relevance, effectiveness, and financial performance of the EIB and the EIF debt support for SMEs and mid-caps.
Relatedly, the independent evaluation of the EIB Group's equity and quasi-equity support for SMEs and mid-caps looked at how different financial tools affect innovative companies at various growth stages.
Key findings
Why does the EIB Group’s support for small and medium-sized businesses matter?
Small businesses and medium-sized companies are key drivers of the EU economy, fostering employment, economic stability, growth, and productivity. By working with banks and other financial institutions, the EIB Group provides targeted financing when and where it’s most needed.
Why it matters
- The EIB Group supports everyday businesses that drive economic growth and employment, making it clear how this work benefits the broader community.
What shifts in needs have SMEs experienced in turbulent times?
Over the past 15 years, EU small businesses struggled with access to finance due to economic shocks and fluctuations. The EIB Group has responded by adjusting its products to help both banks and small businesses better manage these financial challenges.
Why it matters
- The EIB Group is responsive and flexible, adapting its support to ensure businesses can survive and thrive through economic fluctuations.
How did the EIB Group adapt to the evolving needs of SMEs?
The EIB Group has diversified its product offerings to better serve the diverse needs of small businesses and mid-sized companies. This includes lending products aimed at fostering climate action, gender equality, and innovation.
While the European Investment Fund mainly offers guarantee products, the EIB primarily focuses on providing loans, although not exclusively. This way the EIB Group ensures that SMEs can contribute towards these EU policy objectives.
By extending support beyond traditional banks, the EIB Group reaches SMEs that lack external financial support, tailoring its products to meet the evolving needs of banks and financial intermediaries.
Why it matters
- The EIB Group provides targeted and diverse financial support to address a wide range of needs.
Why the need for more incentives?
To unlock investments towards high-impact areas aligned with EU objectives, banks and other lenders need to prioritise investments in climate change and innovation. Encouraging these financial institutions to do more, and incentivising SMEs to invest in these areas, can significantly boost investments towards achieving EU objectives.
Why it matters
- Unlocking investment in these sectors can lead to significant benefits such as environmental sustainability, technological progress, and greater economic resilience.
Why the need for a clear strategy and better use of data?
The EIB Group needs a clear strategy and more effective use of data to meet businesses' needs. By refining and improving its small business support programs, the EIB Group can adopt a more effective and responsive approach.
Why it matters
- A focus on customer experience and effective use of data ensures that the EIB Group’s support is as beneficial as possible, leading to better outcomes for businesses and, by extension, the economy and society.
Recommendations
The EIB Group can ensure that its financial support is as effective and impactful as possible, driving growth and stability across the European Union. For that, it should:
Define an up-to-date strategy
Define clear goals and outcomes expected from SME financing and adapt to changing market conditions.
Enhance thematic support
Provide more incentives for banks and businesses to invest in crucial areas like climate action and innovation.
Be adaptable
Analyse and respond continuously to the evolving needs of financial intermediaries to ensure timely and effective support.
Focus on final beneficiaries
Develop tools to better understand and address the needs and experiences of businesses supported.