# EUR-Lex - 52011DC0870 - EN

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# 52011DC0870

**COMMUNICATION FROM THE COMMISSION An action plan to improve access to finance for SMEs /* COM/2011/0870 final */**

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1.
smes – drivers of growth

Europe's economic
success depends largely on the growth of Small and Medium sized Enterprises
(SMEs) achieving their potential. SMEs contribute more than half of the total
value added in the non-financial business economy and provided 80% of all new
jobs in Europe in the past five years.[1]

SMEs often face significant difficulties in
obtaining the financing they need in order to grow and innovate.

One of the key priorities set out in Europe
2020, the EU's growth strategy for the coming decade, as well as in the
Commission's Single Market Act[2]
and the Small Business Act[3]
is to facilitate access to finance for SMEs. The Annual Growth Survey[4] has underlined the crucial role
of a healthy financial system to support growth and set out priorities for
action in the short-term perspective.

In this context the reform programme for
financial services, implemented as a response to the financial crisis, can
bring about regulatory benefits to SMEs. In addition, the Commission is
proposing to release new targeted funding at EU level to address the key market
failures that limit the growth of SMEs.

The Commission is presenting in this Action
Plan the various policies that it is pursuing to make access to finance easier
for Europe's 23 million SMEs and to provide a significant contribution to
growth.[5]

2.
Responding to the problems

Difficulties in accessing finance are one of
the main obstacles obstructing the growth of SMEs, as presented in the annex in
more detail.[6]
There are multiple causes for such obstacles, some cyclical[7], some structural. Information
asymmetries between the suppliers and demanders of funds play a major role.

SMEs are to a very large extent dependent on
bank loans for their external financing, therefore suitable alternatives should
be put at their disposal.

The Commission will use regulation to
make SMEs more visible to investors and markets more attractive and accessible
for SMEs. Regulatory changes will keep the right balance between prudential
regulation and financing of SMEs, and between investor protection and tailored
measures for SMEs.

Secondly, the Commission intends to continue
using the EU budget to facilitate access to finance for SMEs to address
the key market failures (i.e. information asymmetries and fragmentation of
venture capital market) that limit the growth of SMEs. EU intervention must
have a clear added value complementing financial resources available at
national level and mobilise additional finance (presence of a "financial
multiplier effect")[8].

Thirdly, the Commission will use its coordinating
role, working in particular with Member States, to exchange best practices and
develop synergies between actions taken at the national and EU levels.

While most of the measures will have a medium
to long term horizon, it is also important to stress that Europe is already
taking a number of steps to address the immediate difficulties.

The main objective is to stabilise the economic
and financial situation. At the end of October, the Heads of State and
Government agreed on a comprehensive set of measures to address the current
tensions in financial markets whilst also safeguarding the flow of credit to
the real economy and avoid excessive deleveraging.

More specifically for SMEs, Europe has been
providing a balanced mix of flexible financial instruments under the current
programme period (2007-2013), essential in addressing the diverse financing
needs of SMEs. The financial instruments of the Competitiveness and Innovation
Framework Programme (CIP) with a budget of €1.1 billion should enable financial
institutions to provide about €30 billion of new finance[9] for more than 315 000 SMEs. In
2008-2011, the European Investment Bank (EIB) provided around €40 billion of
lending for SMEs, which benefitted more than 210 000 SMEs.

In the field of Cohesion Policy the Commission
already adopted measures to provide investments for SMEs in 15 Member States through
financial engineering instruments designed by structural funds. These measures
have been further reinforced allowing investments in SMEs in all Member States
at any stage of their normal business activity and represent thus an important
alternative financial source to gain access to credit. Assistance
to enterprises provided through equity investments, guarantees and loans
is estimated to amount to at least €3 billion in the current financial period.

Finally, in order to provide better access to
loan finance a specific Risk Sharing Instrument (RSI) is being created under
the EU's Seventh Framework Programme for Research (FP7) Risk-Sharing Finance
Facility as of 2012. The RSI will provide partial guarantees to financial
intermediaries through a risk-sharing mechanism, thus reducing their financial
risks encouraging them to provide lending between €25 000 and €7.5 million to
SMEs undertaking research, development or innovation
activities.

3.
regulatory measures
3.1.
Improving the regulatory framework for venture capital
3.1.1.
A new legislation on venture capital

Venture capital funds are operators that
provide mostly equity finance to companies that are generally very small, in
the initial stages of their corporate development. In the EU, venture capital
funding has high, but largely unexploited, potential for development of SMEs.
Despite the huge size of the asset management industry in the EU, no specific
provisions in current EU legislation have been designed to channel equity funds
to SMEs. Venture capital funds managers can rarely benefit from the passport
that has been introduced in the Directive on Alternative Investment Fund
Managers (AIFM), because its threshold of €500 million is higher than the size
of most EU venture capital funds’ portfolios.

The Commission[10]
is therefore proposing a new European venture capital regime that will enable
EU venture capital funds to market their funds and raise capital on a
pan-European basis across the Single Market. The new regime will reduce
fragmentation of the venture capital markets along national lines that prevent
cross-border operations and limit the supply of venture capital.

The new framework will be simple and efficient,
with a single registration in the home Member State, and with simplified
reporting obligations, and adapted organisation and conduct of business rules.

Once in place this framework should increase
the scale of the VC market and lead to: (i) larger, more efficient VC funds,
with more possibilities to specialise by type of investments; (ii) increased
competition between funds and better diversification of their investments; and
(iii) more cross-border financing available for SMEs.

Together with this Action Plan, the Commission
is presenting a new EU venture capital framework creating a genuine internal
market for VC funds. The Commission invites the Parliament and the Council to
adopt this legislative proposal by June 2012.

3.1.2.
Regulatory framework for investment in venture
capital

Institutional investors, in particular
insurance companies, but also to some extent banks, are potential investors in
VC funds. In some Member States, they are already significant investors today.

The new prudential frameworks for insurance
(Solvency II[11])
and banks (Capital Requirements Regulation and Directive[12]) have given rise to concerns
that it could discourage investments in VC funds, treated as non listed investments
or high risk assets (along with commodities and hedge funds) in the
calculations for prudential requirements[13].

This treatment responds to prudential concerns.
However a well-calibrated legislative framework for venture capital, that
recognises in particular the benefits of diversification, may allow for a
certain amount of VC investments in a way that does not cause prudential
concerns.

In 2012, as part of a wider reflection on
long-term investment, on the basis of technical work to be jointly done by the
European Banking Authority and the European Insurance and Occupational Pensions
Authority, the Commission will carry out a study on the relationship between
prudential regulation and venture capital investments by banks and insurance
companies.

3.1.3.
Taxation reforms benefiting SMEs

The Commission worked together with national
and industry experts on ways to remove regulatory and tax barriers to
cross-border VC investments. . A group of tax experts[14] has identified the main tax
problems for cross-border VC investment which can lead, due to the lack of coherence between the 27 tax systems across the
EU, to double taxation, tax treatment uncertainties and administrative
obstacles.[15] Although the bilateral double taxation
conventions between Member States should normally prevent these difficulties,
they may not always cater for the complex commercial structures used in VC
investment.

The European regime for venture capital will
remove obstacles to cross-border fund-raising but will not as such solve the
taxation problems that funds invested across borders face. However, a common
notion of a venture capital fund would be a good starting point for further
exploring with Member States solutions to the tax problems which may hinder the
cross-border investments of such funds.

In 2012, the Commission will complete its
examination of the tax obstacles to cross-border venture capital investment
with a view to presenting solutions in 2013 aimed at eliminating the obstacles
while at the same time preventing tax avoidance and evasion.

3.2.
State aid rules relevant for SME access to
finance

State aid policy can support SME access to
finance in different ways, allowing aid to banks for reasons of financial
stability, and providing guidance to Member States on how to design aid schemes
that promote the Europe 2020 objectives (R&D and innovation, regional and
social cohesion, etc.) and take account of the specific needs of SMEs.

The Risk Capital Guidelines[16] allow supporting early stage
financing for SMEs, leveraging private capital and alleviating market failures.
The Commission has recognised a wider equity gap and increased the threshold
for equity investment in a start up company from €1.5 million to €2.5 million.
The State aid rules allow intervention even beyond this threshold, in specific
circumstances.

By 2013 the Commission will review the General
Block Exemption Regulation and a number of State aid guidelines, including on
Risk Capital, to achieve Europe 2020 objectives and respond to SME needs.

3.3.
Improving SME access to capital markets

In order to improve SME[17] access to capital markets, the
Commission is proposing a number of regulatory changes that aim at improving
the visibility of the SME markets and reducing wherever possible the costs and
the regulatory burden for SMEs, while keeping an adequate level of investor
protection.

3.3.1.
More visible SME markets

The Commission wants to facilitate the
development of homogeneous SME growth markets attractive for investors. In the
proposal on the Directive on Markets in Financial Instruments (MIFID)[18], it has proposed to attribute
the label SME growth market to those Multilateral Trading Facilities (MTFs)
that would respond to a common set of characteristics. The aim is to find an
adequate balance between proportionate requirements for SMEs, and a high level
of investor protection[19].

This label should allow these markets to gain
more visibility, attracting investors and making them more liquid. The label
would be voluntary and would be based on requirements to be adopted by the
Commission based on a proposal by the European Securities Markets Authority
(ESMA). The label would be granted by national competent authorities. The label
will in turn allow markets to develop more standardised tools (indexes,
specialised funds investing in those markets), to create networks between MTFs
and to follow best practices.

In October 2011, an SME growth market label
was proposed in EU capital markets legislation (MIFID). The Commission invites
the Parliament and the Council to adopt this legislative proposal as swiftly as
possible.

3.3.2.
More visible listed SMEs

The proposal for a modification of the
Transparency Directive[20]
aims at improving access to regulated information in Europe. Currently,
access to financial information on listed companies is unnecessarily difficult:
interested parties need to go through 27 different national databases in order
to find this information.

High quality comparable information widely
available from a central access point at the EU level would facilitate a larger
use of information on listed SMEs by investors. A central access point could
lower barriers and entry costs for new commercial information providers that
may wish to enter the market to address the gap in the provision of information
on smaller companies. Equally, smaller issuers themselves may also be
encouraged to invest in producing improved information and document formats
targeted at cross border investors.

The Commission, with the assistance of ESMA,
will enhance the existing storage system and develop a single access point to
regulated information at EU level. The
Commission will facilitate access to high quality information on listed SMEs.
The Commission invites the Parliament and the Council to adopt this legislative
proposal by end 2012.

3.3.3.
Reducing reporting burdens for listed SMEs

In order to simplify accounting rules
for SMEs and further reduce their administrative burden, the Commission adopted
a proposal for a Directive on the annual financial statements, consolidated
financial statements and related reports of certain types of undertakings.[21] This could allow SMEs to save
up to €1.7 billion per year. Increased comparability of financial statements
and a better focus on essential information should result in better investment
decisions and a better allocation of capital.

The Commission is also proposing to reduce requirements
and costs for small issuers, notably eliminating quarterly reporting and
through a wider use of templates prepared by ESMA, which would facilitate
comparability of information for investors. The lighter regime of the new Transparency
Directive will apply to all issuers, and it will have a greater impact in terms
of cost reduction on small issuers. Investor protection would be guaranteed
through the mandatory disclosure of half-yearly and yearly results, as well as
through the disclosures required by the Market Abuse and Prospectus Directives.
Companies would of course be free to continue to provide more information to
investors.

The recent amendment to the Prospectus
Directive[22]
introduced a proportionate disclosure regime for SMEs and companies with
limited market capitalisation. This regime should limit the amount of
disclosures and reduce administrative burdens for SMEs and small issuers,
without prejudice to investor protection.

In October 2011, a legislative proposal amending
the Accounting Directives was presented in order to simplify and improve
accounting rules for SMEs.

At the same time, the Commission presented a
proposal revising the Transparency Directive in order to reduce the regulatory
burden for small issuers.

The Commission invites the Parliament and the
Council to adopt these legislative proposals by end 2012..

By July 2012, delegated acts in the context of
the Prospectus Directive will be proposed, specifying the content of a
proportionate disclosure regime for SMEs and small issuers.

3.4.
Reviewing the impact of bank capital
requirements on SMEs

The existing capital framework for banks
developed by the Basel Committee for Banking Supervision - transposed in EU law
via two adaptations of the Capital Requirements Directive (the CRD III[23] and the proposed CRD IV and
CRR) - aims at strengthening prudential banking rules. In addition to requiring
more and higher quality capital, it imposes higher capital charges for market
activities and enhances rules on the management of liquidity risk. This will
provide for enhanced financial stability, more robust banking business models
and stronger balance sheets.

In the CRD IV, the current prudential treatment
of SME loans will continue to benefit from the provisions of Basel II (a
preferential risk weight for SMEs exposures of 75% under the standardized
approach). An even more beneficial regime for exposures to SMEs would require a
revision of the international Basel framework. It would especially require
demonstrating that the current approach is too stringent. This is why the risk
weight for SMEs exposure is subject to a review clause in the Commission's
proposal.

The Commission, consulting the European Banking
Authority (EBA), will, within 24 months after the entry into force of the new
Regulation, report on lending to SMEs and natural persons. It will submit its
report to the European Parliament and the Council, together with any
appropriate proposal concerning the review of the SMEs' risk weight. In this
context, the EBA is requested to analyse and report by 1 September 2012 on the
current risk weights, testing the possibilities for a reduction, taking into
consideration a scenario of a reduction by one third in relation to the current
situation.

Based on the report from EBA and its
recommendations, the Commission will consider appropriate measures addressing
the issue of SMEs risk weighting in the context of the CRD IV and CRR
framework.

3.5.
Accelerating the implementation of the Late
Payments Directive

Many payments in commercial transactions
between businesses or between businesses and public authorities are made much
later than agreed. This is costly for European businesses, amounting to some € 1.1 trillion in terms of delayed turnover.[24]
Cash flow for SMEs is expected to be improved through
reduced payment times as a result of the provisions of the revised Late Payments Directive.[25] This could lead to
reduced needs for short term external financing.

The Commission strongly encourages Member
States to accelerate the implementation of the Late Payments Directive in
advance in respect of the transposition deadline of March 2013.

3.6       An innovative regime for European Social Entrepreneurship
Funds

Social businesses are an emerging sector in the EU. They are
undertakings whose primary objective is to achieve social impacts, rather than
generate profits for shareholders or other stakeholders.

Being socially innovative and often newly created businesses, they
are mostly composed of a large population of SMEs, facing problems of access to
finance similar to all small businesses.

The Commission is presenting a new European
Social Entrepreneurship Funds regime that will enable EU funds to specialise in
this field and to be marketed across the EU under a specific and distinctive
label. The Commission invites the EP and Council to adopt this new regulation
before the end of 2012.

4.
EU Financial measures for SMEs

The Commission has proposed a number of new
financial instruments to facilitate SMEs’ access to finance also in the future
(2014-2020). It is important to ensure more simplicity and better coherence
between the different EU funding schemes. The Commission introduced the
principles of debt and equity platforms that will standardise the common
mechanics of the instruments, streamline relations with financing partners and
foster administrative efficiency.[26]
Under the Cohesion Policy 2014-2020 the scope of the financial instruments will
be enhanced, by extending their scope and by rendering their implementation
frameworks more flexible and effective.

4.1.
Measures to improve lending to SMEs

The Commission has proposed an EU Debt
Financial Instrument for enterprises' growth and research and innovation, which
will provide guarantees and other forms of risk-sharing to improve lending to
SMEs, including research and innovation-driven SMEs.

The financial instrument will be an integrated
structure comprising different facilities with specific policy objectives, in
line with the Commission Communication on a "Framework for the next
generation of innovative financial instruments – the EU Equity and Debt
Platforms"[27].
It will be funded by the Programme for the Competitiveness of Enterprises and
small and medium-sized enterprises  2014-2020)[28]
(COSME),  by the Horizon 2020[29]
programme and the Creative Europe Programme.

Through COSME[30],
the Commission will be providing enterprises and in particular SMEs with a Loan
Guarantee Facility, which will offer guarantees for:

(i) debt financing via loans, subordinated and
participating loans or leasing to reduce the particular difficulties SMEs face
in accessing finance for their growth;

(ii) securitisation of SME debt finance
portfolios, aimed at mobilising additional debt financing for SMEs.

The Loan Guarantee Facility shall, except for
loans in the securitised portfolio, cover loans up to €150 000 and with a
minimum maturity of 12 months.

Furthermore, the Commission will, through the
Horizon 2020[31]
programme, provide a Debt facility with an SME Window to support research and
innovation (R&I)-driven SMEs. The SME Window will target R&I-driven
SMEs with loan amounts that complement finance to SMEs by the Loan Guarantee
Facility under the COSME Programme.

Additionally, the Commission is also proposing
to set up a guarantee facility aimed especially at those SMEs which are operating
in the cultural and creative sectors. The facility will also be implemented
under the EU debt Financial Instrument.

Finally, under the EU Programme for Social
Change and Innovation, the Commission proposes financial support to
microfinance for micro-enterprises
and financing for social enterprises.

The Commission and stakeholders will organise
workshops with Members States that are still lagging behind in the use of EU
financial instruments at the moment, in order to facilitate
institution-building and to promote the use of the EU guarantees and venture
capital.

The Commission will continue enhancing the
supply of loans to micro enterprises and promote the adoption of the European
Code of Good Conduct for Microcredit Provision.

The Commission has proposed:

1. A
reinforced and expanded EU Debt Financial Instrument to improve lending to
SMEs, including R&I-driven SMEs. The Instrument encompasses a Loan
Guarantee Facility under the COSME Programme (2014-2020) and an SME Window
under Horizon 2020's Debt facility.

The EU Debt
Financial Instrument will also include a Cultural and Creative Sectors Facility
financed under the Creative Europe Programme (2014-2020), to enhance access to
finance for SMEs in the European cultural and creative sectors.

2. Under the EU
Programme for Social Change and Innovation (2014-2020),
a specific Microfinance and Social Entrepreneurship Axis that will support
notably microfinance for micro-enterprises,
the build up the institutional capacity of microcredit providers and financing
for the development of social enterprises;

The European Investment Bank will maintain its
SME loan activity at a sustained pace close to the 2011 level, subject to
market conditions and in line with its funding capacity. The EIB will continue
to contribute to improving loan conditions, increasing flexibility and ensuring
rapid allocation. EIB and EIF will continue developing synergies through
risk-sharing operations, including for the securitisation of portfolio of SME
debt, partly in cooperation with the Commission.

4.2.
Measures to improve access to venture capital
and other risk financing

The Commission has
proposed an EU Equity Financial Instrument for EU enterprises' growth and
research and innovation, which will provide venture capital and mezzanine
financing to enterprises from their early stage (including seed) to the growth
stage.

The financial
instrument will be an integrated structure comprising different facilities with
specific policy objectives, in line with the framework for the next generation
of innovative financial instruments. It will be  funded by the Programme for
the Competitiveness of Enterprises and SMEs (COSME) and by  Horizon 2020.

COSME will include
an Equity Facility covering enterprises in their expansion and growth-stages. The
facility will also have the possibility to make early-stage investments in
conjunction with the Horizon 2020 Programme.

The Horizon 2020
Programme will include an equity facility targeting enterprises in their
early-stage. The facility will also have the possibility to make expansion and
growth-stage investments in conjunction with the COSME Programme.

The EIB Group will
continue supporting the growth of SMEs through its wide range of equity
products and particularly the enlarged EIB Risk Capital Mandate. Further
cooperation between the EIB Group and the European Commission, including
through risk-sharing arrangements, will be developed in order to facilitate the
mobilisation of additional public and private resources.

The Commission has proposed:

1. A reinforced
and expanded equity financial instrument to improve SMEs' access to venture
capital and other risk financing, from their early stage (including seed) to
their growth stage. The equity financial instrument will be funded by the
Programme for the Competitiveness of Enterprises and SMEs and by Horizon 2020.

2. The establishment of funds-of-funds, within
the EU Equity Financial Instrument, to provide capital to venture capital funds
that target notably investments in more than one Member State. National public
financial institutions, as well as private investors, will be invited to
participate in the fund.

The EIB Group will continue supporting the
growth of SMEs through its wide range of equity products and particularly the
enlarged EIB Risk Capital Mandate. Further cooperation between the EIB Group
and the European Commission, including through risk-sharing arrangements, will
be developed in order to facilitate the mobilisation of additional public and
private resources.

5.
Other measures to improve the environment for SMEs
5.1.1.
Better information for SMEs

SMEs would greatly benefit from easier access
to information at local and regional level. Member States’ authorities are encouraged to improve
SMEs’ access to different national and regional sources of finance and, in this
context, to evaluate the possibility of creating a single national online database of sources of
finance based on good practices.

The European Commission and the EIB Group, in
cooperation with financial intermediaries, will expand SMEs’ access to
information about the various EU financial instruments and the SME Loan
facility. Similarly the information to intermediaries, including smaller banks,
will be improved. Efforts will be made to simplify the administrative burden
and broaden the scope of languages.

Banks and other financial
institutions are encouraged to provide clients with information about
alternative financial instruments and actively support networks of mentors,
advisors and business angels.

The Commission will:

1. Reinforce the financial advisory capacity
of the Enterprise Europe Network in order to provide SMEs with better
information about the different sources of finance by complementing existing
national information structures.

2. Ensure that all the information on EU finance
will be pooled and made available through a single, multilingual online portal
covering the different sources of EU finance available for SMEs.

Banks and other financial intermediaries have
declared that they will promote actions among their members to reinforce
information about EU financial instruments and public grants to SMEs.

5.1.2.
Improve monitoring of the SME lending market

Currently, exact statistics on loans to SMEs
are not collected. Available approximations such as loans below €1 million or
below €250,000 show that the SME share in total new loans in the euro area is
on average about 20%.[32]

Improving the monitoring of the SME lending
market would allow better and more evidence-based policy making. It would also
help assessing the impact of measures in support of SMEs' finance, as well as
the new capital requirements applicable to credit institutions.

The Commission will work together with bank
federations and will take advice from other concerned institutions (ECB, EBA)
to reinforce the analytical framework for SME lending striving for better
comparison and more coherent methodology.

5.1.3.
Promote qualitative rating

Qualitative indicators of performance - the
entrepreneur's track record, the competitive position of the company in the
market or other intangible assets - are essential to complement the standard
valuation of SMEs.

The submission of qualitative questionnaires is
already a common practice among European banks. However, the process of
statistically modelling such information is not immediate, and most models are
facing the difficulty of losing information when transforming qualitative data
into quantitative models.

Further, there are already provisions in place
that allow SMEs to request from the banks to be made aware of their rating and
scores[33].
It would be important to fully implement these provisions in practice.

The Commission will promote the exchange of
good practice and encourages the banking sector and SME federations to promote
the use of qualitative rating as a tool to complement the standard quantitative
assessment of SMEs’ creditworthiness.

5.1.4.
Stimulate the activity of “Business angels” and
cross-border investments

Business angels provide both financing and
managerial experience, which increase the likelihood of start-up enterprises
surviving. They often constitute the largest source of external funding, after
family and friends, in newly established ventures. Due to their informal nature
their activity is difficult to measure.

The Commission will study the European business
angel market and other informed markets and explore ideas to stimulate it by
supporting investment and investor-readiness programmes, encouraging potential
investor groups to become business angels, and building the capacity of business
angel network managers.

In 2011 the EIB group has increased its Risk
Capital Mandate to €5 billion and extended the scope to include co-investing
with business angels.

The Commission will:

1. Further encourage co-investments with
business angels in different forms in co-operation with the EIF and Member States within the possibilities under Structural Funds.

2. Consider measures to further develop
cross-border matching between enterprises and investors, in particular business
angels, based on proposals from an expert group in 2012.

3. Improve the matching of offers and requests
for venture capital within the Enterprise Europe Network

5.1.5.
Promote information on SME access to capital
markets

Significant measures are
needed to create a favourable environment for SMEs seeking growth capital,
focusing on ways to attract a wider set of investors and helping to lower the
cost of capital of SMEs. There is a need to increase the information to
mid-sized enterprises about the advantages and costs associated to listing. The Commission will also consider how to promote access to SME bond
markets and securitisation. The Commission, together with the stakeholders in
the SME Finance Forum, will continue[34]
to contribute to information campaigns and prepare a European information guide
for companies aspiring to go public. The Commission will also carry out
promotional activities such as an award for the SME listing of the year.

Stakeholders and stock exchanges in particular
are encouraged to increase their information to SMEs about the advantages of a
market listing and how to go public.

The Commission will promote the establishment
of an independent institute to promote  analyses and research on listed
medium-sized enterprises thereby increasing investors' interest in this
segment.

5.1.6.
Policy coordination and implementation

The Commission will continue to work within the
SME Finance Forum to explore new strategies to facilitate access to finance for
SMEs. Mutual policy learning is essential to improve the performance of the European
financial system. Several Member States already established national SME
Finance fora with business organisations, banks and other financial
institutions to provide practical solutions to improve access to finance.

National experiences are particularly relevant
for the lending practices and process. In various Member States several actions
have been taken in order to enhance the transparency of the lending process,
including feedback to SMEs when loan applications are refused.

In some Member States, national lending codes
or credit mediators have been established in order to address the problem of
information asymmetry in the risk assessment process of SMEs and to improve the
lending process. In some Member States, the Consumer Credit Directive has been
extended to small enterprises. While these various models may reflect different
national circumstances, there is scope for an overall enhancement of their
functioning.

The Commission encourages:

Member States and stakeholder associations to establish national SME
Finance fora to provide solutions for an improved access to finance.

Banks, other financial institutions and SME
federations to establish national codes of conducts and guidelines to improve
transparency in the lending process and, if appropriate, support credit
mediator functions.

In 2012, the Commission intends to review
current lending practices, including transparency mechanisms.

Based on the outcome of that review, the
Commission may consider taking regulatory action to encourage responsible and
transparent lending to SMEs.

6.
Conclusion

SMEs will be a source for growth and jobs
in Europe only if their access to finance is improved. In the short term, this
means stabilising financial markets and strengthening the banks, while ensuring
that credit continues to flow to SMEs.

In the medium term, the Commission intends
to significantly improve the regulatory environment for SMEs, fostering a
single market for venture capital, improving capital markets and reducing costs
and burden for SMEs. The Commission intends to reinforce its guarantees and
venture capital facilities, complementing the efforts carried out by the EIB
and Member States. Finally, the Commission intends to promote information for
SMEs, to SMEs and on SMEs, to improve access to financial instruments, to
reduce the information gap faced by SMEs in accessing finance and to facilitate
their access to capital markets.

The EU and Member States must work
together in order to improve SMEs’ access to finance. The Commission is playing
its part with actions envisaged in this Action Plan and will work with Member
States, the financial sector and SME federations to ensure that the actions
bear fruit and contribute to economic recovery.

[1]               Structural Business Statistics (Eurostat)

http://epp.eurostat.ec.europa.eu/portal/page/portal/european_business/data/database

[2]               COM 2011 206

[3]               COM (2011) 78

[4]               COM (2011) 815 final

[5]               Future initiatives following this Action Plan will be
prepared carefully and include appropriate impact assessments where relevant.

[6]               ECB, Survey on the Access to Finances of SMEs,
February 2010

[7]               EIM, Cyclicality of SME Finance, March 2009

[8]               The actions are consistent with the present and
future financial framework. Any envisage action in this action plan is coherent
with the proposal for both the Programme for the Competitiveness of Enterprises
and SMEs and for the Horizon 2020 Programme. The cost for the agencies and the
European Enterprise Network will be covered by allocations already foreseen in
the official programming of the Commission.

[9]               i.e. for every Euro invested through CIP, about €30
are finally obtained by the beneficiary

[10]             The Commission 2007 proposal of mutual recognition of
venture capital funds, although backed by the Member States in 2008, has not
reduced regulatory fragmentation along national lines.

[11]             Directive 2009/138/EC of the European Parliament and of
the Council of 25 November 2009 on the taking-up and pursuit of the
business of Insurance and Reinsurance (Solvency II).

[12]             On 20 July 2011, the Commission adopted a legislative
package to strengthen the regulation of the banking sector. The proposal
replaces the current Capital Requirements Directives (2006/48 and 2006/49) with
a Directive and a Regulation and constitutes another major step towards
creating a sounder and safer financial system. The directive governs the access
to deposit-taking activities while the regulation establishes the prudential
requirements institutions need to respect. See COM(2011) 453 final, COM(2011)
452 final, proposed by the Commission on 20 July 2011 and currently under
negotiation in Council and Parliament.

[13]             See for instance article 123 in the proposed Regulation
on prudential requirements for credit institutions and investment firms, COM(2011) 452 final of 20.7.2011.

[14] http://ec.europa.eu/taxation_customs/resources/documents/taxation/company_tax/initiatives_small_business/venture_capital/tax_obstacles_venture_capital_en.pdf

[15]             The diverging definitions of what constitutes a
permanent establishment often oblige VC fund to set up subsidiaries and to face
increased administrative and tax burden.

[16]             Community guidelines on state aid
to promote risk capital investments in small and medium-sized enterprises, OJ C 194, 18.8.2006, p. 2–21.

[17]             In the context of financial markets, SMEs include also
firms with limited market capitalisation (below 100 million EUR).

[18]             Directive on markets in financial instruments repealing
Directive 2004/39/EC of the European Parliament and of the Council, COM(2011) 656 final, adopted on 20.10.2011.

[19]             The level of investor protection would be further
strengthened by the proposed extension of the scope of application of the
Market Abuse Directive to MTFs.

[20]             Directive amending Directive 2004/109/EC on the
harmonisation of transparency requirements in relation to information about
issuers whose securities are admitted to trading on a regulated market and
Commission Directive 2007/14/EC, COM(2011) 683 final,
adopted on 25.10.2011.

[21]             COM(2011) 684 final

[22]             Directive 2010/73/EC, OJ L 327 of 11.12.2010

[23]             Directive 2010/76/EU, already in force.

[24]             SEC(2009) 315

[25]             Directive 2011/7/EU of the European Parliament and of
the Council of 16 February 2011 on combating late payment in commercial
transactions. It will have to be transposed into national
law by 16 March 2013 at the latest

[26]             COM(2011)662

[27]             COM(2011)662

[28]             COM(2011)834/2

[29]             COM(2011) 808 final

[30]             The indicative budget for the debt and equity
facilities under COSME is €1.4 billion.

[31]             The indicative budget for the debt and equity
facilities under Horizon 2020 is €3.8 billion.

[32]             ECB MFI Interest Rate Statistics, Euro area new loans
to NFC volumes, average for Aug 2010 – Jul 2011

[33]             Article 145(4) of the Capital Requirements Directive,
and article 418 (4) of the proposed Capital Requirement Regulation.

[34]             «EU Finance Days for SMEs» about funding for SMEs were
organised in 2008/10 in all the EU capitals