At the Innovative Enterprise Conference in The Hague, the creation of a new EU Securitisation Instrument for European banks was announced by Commissioner Carlos Moedas, EIF Chief Executive Pier Luigi Gilibert and EIB Vice-President Pim van Ballekom. An access to finance report for companies working with Key Enabling Technologies was also presented.
The European Commission, European Investment Fund (EIF) and European Investment Bank (EIB) have launched the SME Initiative Securitisation Instrument (SISI) that will enable more lending to small and medium-sized enterprises (SMEs) and small midcaps. Securitisation is the process where a financial instrument is created, typically by a lender such as a bank, by pooling assets (for example SME-loans) for investors to purchase or guarantee. The SISI will stimulate economic growth and counter fragmentation of the internal market when it comes to access to credit by SMEs, as banks' liquidity will be increased and new capital for lending will be freed up. New amendments to the InnovFin and COSME Delegation Agreements signed today create the framework for SISI, available to banks operating in EU countries. They will be invited to respond to calls for expression of interest, administered by the EIF, in the context of SME Initiative mandates implemented in interested EU countries. The EIF will implement the instrument through securitisations in the form of guarantees, as well as by purchasing securitisation notes. In return for the credit risk protection on the securitised portfolios provided by EIF (also on behalf of the EIF) and the EIB, the banks will commit to originating new debt finance to SMEs and small mid-caps at advantageous terms. The purpose of the SISI is to combine the resources of the participating EU countries, which include European Structural and Investment Funds (ESIF), resources of the EU Framework Programme for Research and Innovation (Horizon 2020), as well as resources from the EU Programme for the Competitiveness of Enterprises and SMEs (COSME) and resources from the EIB and EIF. The pooling of resources and the collective efforts to promote the instrument will allow more effective risk-sharing and capital relief for the benefit of SMEs and small mid-caps.