Notice of implementation of the ETF start-up facility, the SME guarantee facility and the seed capital action under the multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005)

(2002/C 54/04)

(Text with EEA relevance)

This notice is addressed to financial intermediaries for SMEs (such as banks, institutions operating guarantee schemes, seed and venture capital funds and incubators). It outlines three financial instruments that aim to improve the financial environment for SMEs by extending existing, and introducing new, financial instruments for the financing of SMEs. This programme is open to the Member States of the European Union, Norway, Iceland and Liechtenstein.

The indicative budgetary appropriations for the period 2001-2005 amount to EUR 323 million.

Under Council Decision 2000/819/EC on a multinational programme for enterprise and entrepreneurship(1), and in particular for small and medium-sized enterprises (2001-2005), the European Investment Fund (EIF) is operating, on behalf of the European Commission, the financial instruments of this programme. On 18 December 2001 the European Commission signed the fiduciary and management agreements with the EIF concerning the implementation the following three facilities:

1. THE ETF START-UP FACILITY

The ETF start-up facility will support the establishment and financing of SMEs in their start-up phase by investing, pari passu with private equity investors, in relevant specialised venture capital funds, particularly in seed funds, smaller funds, funds operating regionally or funds focused on specific sectors or technologies, or venture capital funds financing the exploitation of R & D results, e.g. funds linked to research centres and science parks, which in turn provide risk capital for SMEs.

The ETF start-up facility will also take equity shares in business incubators, pari passu with private equity investors. In this respect, the incubators shall be treated in a similar way to venture capital funds.

2. THE SME GUARANTEE FACILITY

The SME guarantee facility will provide counter guarantees or, where appropriate, co-guarantees for guarantee schemes operating in Member States, Norway, Iceland and Liechtenstein, and direct guarantees in the case of any other appropriate financial intermediary.

In order to make a full range of guarantee products available to SMEs, the four following windows are available under the facility:

- loan guarantees to support enterprises with growth potential, with up to 100 employees. Under this window, the EIF issues partial guarantees (directly or indirectly) to cover portfolios of loans,

- guarantees for portfolios of micro-loans for very small enterprises with up to 10 employees to encourage financial institutions to become more involved in that area by offering loans of a smaller amount which proportionally involve higher handling costs. Additional support to financial intermediaries is foreseen in order to offset partially the higher administrative costs inherent in such activities,

- counter or co-guarantees of eligible guarantee schemes to cover equity investments in SMEs with fewer than 250 employees. The EIF will not provide direct guarantees to venture capital funds,

- guarantees to cover portfolios of loans for the financing of IT equipment, software and training in respect of specific activities to promote the use of the Internet and e-commerce. Priority will be given to small enterprises with up to 50 employees.

3. THE SEED CAPITAL ACTION

The seed capital action aims to stimulate the supply of capital for the creation of innovative new businesses with growth and job creation potential, including those in the traditional economy, through support for seed funds, incubators or similar organisations (such as multipurpose funds that include seed capital in their global investment programme), from their early years onwards. Beneficiaries will be selected exclusively amongst those funds, incubators or similar organisations in which the EIF participates.

The support is aimed at the long-term recruitment of additional investment managers to reinforce the capacity of the venture capital industry to cater for investments in seed capital. It will be in the form of grants covering part of the management cost linked to these labour-intensive investments.

4. SPECIFIC INFORMATION ON THE THREE FACILITIES

Detailed information on the three facilities can be obtained from:

European Investment Fund

43, avenue J. F. Kennedy

L - 2968 Luxembourg

E-mail: info@eif.org

or from the EIF's website at: www.eif.org

The contact details of all financial intermediaries with whom the EIF has signed a contract will be published on the EIF's website in order to allow SMEs to make direct contact with these intermediaries.

Proposals from financial intermediaries will be examined by the EIF on a continuous basis, within the constraints of the available Community budget allocations. The EIF will endeavour to achieve an overall geographic balance.

(1) OJ L 333, 29.12.2000.