COMMISSION STAFF WORKING PAPER
Date: 2011-12-07
Institutions: European Commission
Subjects: company growth, corporate finance, credit, investment, small and medium-sized enterprises, venture capital

EUROPEAN COMMISSION 

Brussels, 7.12.2011 
SEC(2011) 1527 final 

COMMISSION STAFF WORKING PAPER 

Accompanying the document 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL,   
THE EUROPEAN PARLIAMENT,  THE COMMITTEE OF THE REGIONS  
AND THE EUROPEAN AND SOCIAL COMMITTEE 

An action plan to improve access to finance for SMEs 

{COM(2011) 870 final} 

 
 
 
 
  
     
 
1. 

MAIN OBSTACLES TO SME FINANCING  

1.1. 

Access to lending 

Surveys show that SMEs to a very large extent are dependent on bank loans for 
their  external  financing  and  that  they  practically  have  very  few  alternatives. 
30% of companies are using bank loans and 40% bank credit line or overdraft 
facilities.  For  63%  of  SMEs  bank  loans  are  also  the  most  preferable  external 
financing  solution  to  realise  firms'  growth  ambitions.1  Yet,  SMEs  loans 
generally create specific difficulties: (i) management costs for the provider of 
funds can be significant as loans are small in size; (ii) access to information on 
the enterprise can be difficult, as SMEs can operate on niche and local markets, 
and, unlike their larger peers, are not subject to external ratings and extensive 
disclosure  requirements;  and  (iii)  the  central  importance  of  management 
quality in SMEs creates additional complexity for appraising risks, making the 
automation of the credit process for SMEs more difficult.  

These factors also explain why SME rely heavily on local institutions for debt 
financing, who are committed and have a better expertise in managing SMEs in 
their  local  area.  While  very  useful  in providing  loan  financing,  this  financing 
model  may  be  less  effective  in  allowing  SMEs  to  access  wider  sources  of 
capital in the financial markets and across borders.  

The  financial  crisis  and  the  ensuing  economic  recession  have  made  debt 
financing  even  more  expensive  and  difficult  to  obtain.  SMEs  perceive  that  in 
the period of March – August 2011 the conditions of bank financing worsened 
in  terms  of  interest  rate  and  other  costs,  collateral  and  required  guarantees. 
Moreover,  the  willingness  of  banks  to  provide  a  loan  was  also  perceived  as 
deteriorating2. Banks are more risk-averse, asking for higher risk margins and 
demanding more collateral and security3. 

The results of the October 2011 ECB Bank Lending Survey show a significant 
overall tightening of credit standards on loans to SMEs in the third quarter of 
2011. In the period of March – August 2011 6% of SMEs did not apply for a 
bank loan because of fear of possible rejection, and out of those who applied - 
11%  was  rejected,  4%  refused  because  of  high  costs  and  17%  received  less 
than  applied  for.  The  highest  rejection  rate  of  16%  was  among  the  micro 
companies  employing  less  than  10  people.  In  the  last  two  years  constantly 
almost a third of SMEs which applied for a bank loan did not get any credit or 
got less than they applied for.4 Compared to 2007, the success rate in obtaining 
finance decreased by 19% in 2010.5 

1 
2 
3 
4 
5 

ECB and European Commission, SMEs’ Access to Finance Surveys, 2009-2011 
Ibidiem  
UEAPME, European SME finance Survey/Results, 2009 
ECB and European Commission, SMEs’ Access to Finance Surveys, 2009-2011 
EUROSTAT, Access to finance statistics, September 2011 

EN 

2 

   EN 

 
                                                 
1.2.  Access to venture capital 

Insufficient  access  to  appropriate  sources  of  risk  capital,  in  particular  at  the 
early  stage,  continues  to  be  one  of  the  most  significant  constraints  to  the 
creation and development of growth-oriented firms. This is particularly true for 
young,  R&D  intensive  and  innovative  firms.  In  2000,  €22  billion  of  venture 
capital (VC) were raised in Europe. In 2010, the amount raised fell to only €3 
billion.6 The average VC fund size fell considerably and initial public offerings 
have  also  dropped,  creating  additional  difficulties  for  venture  capital  to  exit 
their investments.7  

The EU venture capital market is underdeveloped, especially compared to the 
United States.8 This is also true for the business angel market. It is estimated 
that  there  are  75,000  business  angels  in  Europe,  who  invest  annually  an 
estimated total of €4 billion, compared  to about 260,000 business angels in the 
US,  investing  annually  about  $20  billion.9  Long-term  VC  investments  in  the 
EU  have  been  at  the  level  of  a  quarter  of  that  of  the  US.  Innovative  growth-
oriented  enterprises  need  a  stable  funding  base  to  flourish.  This  requires  the 
European  VC  market  to  reach  a  critical  mass,  economies  of  scale,  increased 
improved  efficiency  as  well  specialisation  and 
flows, 
cross-border 
diversification of funds’ portfolios.  

The  most  commonly  cited10  weaknesses  of  the  European  VC  industry  are 
difficulties  in  raising  capital  from  institutional  investors,  the  quality  of  the 
investment  opportunities  available  and  the  fragmentation  of  the  market  along 
national lines, which prevents the achievement of economies of scale in terms 
of both fund raising and investment. 11  

Also  on  the  demand  side  there  are  issues  to  address.  In  the  2011  survey  on 
SMEs’ access to finance only 7% of SMEs responded that they used equity in 
the  period  of  March  –  August  2011,  when  asked  about  sources  of  external 
financing.  The  main  challenge  here  is  the  lack  of  investment  readiness  or 
financial  knowledge.  60%  companies  replied  that  equity  is  not  applicable  for 
them and further 22% that they are not confident to talk with equity investors 
or venture capital firms to obtain desired results.12 

It  is therefore  essential  that the European  VC  market  is  given  a  decisive  new 
impetus with a view to overcoming market deficiencies and regulatory barriers, 
rendering  the  VC  segment  more  attractive  to  private  investors  and  business 
angels, and creating a self-sustaining market, generating high returns and more 

6 
7 
8 

9 
10 
11 

12 

EVCA (2011)  
EVCA (2011) 
In  2010  the  share  of  public  funding  in  total  VC  funds  raised  amounted  to  30%  in  Europe,  therefore 
incentives for private VC financing are needed. EIF (2011)  
European Business Angel Network (2011) 
Meyer (2010): ”Venture capital adds economic spice”, Deutsche Bank Research 
European  Commission  2009  «Summary  report  on  Cross-border  VC  in  the  EU»  and  European 
Commission 2007 Communication on «Removing obstacles to cross-border investments by VC funds» 
ECB and European Commission, SMEs’ Access to Finance Surveys, 2011 

EN 

3 

   EN 

 
                                                 
capital  for  innovative  SMEs.  It  is  also  essential  that  the  EU  continues  to 
directly  contribute  to  the  provision  of  venture  capital,  leveraging  through  the 
large experience and long practice of the EIB/EIF as well as other appropriate 
financial intermediaries with the necessary expertise. 

1.3.  Access to capital markets 

When trying to expand their business, SMEs need to be able to tap into larger 
sources of capital. However the costs and requirements associated to listing on 
capital markets often deter SMEs from accessing this source of finance.  

Listed SMEs are not sufficiently visible to potential investors or not considered 
attractive  enough  because  of  the  reduced  liquidity  of  their  shares.  In  2011, 
around 12 000 enterprises are listed on regulated markets13. Two thirds of these 
have a market capitalisation lower than € 150 million. In addition, around 2000 
enterprises are listed on Multilateral Trading Facilities (MTFs) in Europe14, the 
vast majority with limited market capitalisation. However, despite being quite 
numerous  in  terms  of  listing,  SMEs  are  very  small  in  terms  of  number  of 
trades,  turnover  and  liquidity.15  Trading  in  equity  markets  is  more  and  more 
concentrated on blue chips, and less and less on SMEs. 

Stock listing by SMEs could be further enhanced and a wider set of investors 
made  more  aware  of  the  opportunities  of  covering  the  SME  segment  of  the 
equity  market.  This  is  particularly  important  taking  into  account  the  role  of 
exchanges  as  exit  routes  for  earlier-stage  investors.  By  contrast,  large 
corporations are benefiting from an integrated EU financial system and are able 
to  access  funds  at  relatively  low  rates  and  can  use  different  financial 
instruments. It is now time to try and extend these benefits also to SMEs.  

2. 

EU FINANCIAL MEASURES FOR SMES (2007-2013) 

Europe  is  already  providing  a  balanced  mix  of  flexible  financial  instruments, 
essential in addressing the diverse financing needs of SMEs.  

The  financial  instruments  of  the  Competitiveness  and  Innovation  Framework 
Programme  (CIP)  have  been  successful  in  improving  access  to  finance  for  SMEs. 
With a total budget of over €1.1 billion fo r the period 2007-2013, the CIP financial 
instruments  will  enable  financial  institutions  to  provide  about  €30  billion  of  new 
finance16 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. These operations are 
complemented by the European Investment Fund’s (EIF) SME equity/mezzanine and 

13 
14 
15 

16 

Federation of European Stock Exchanges. 
This compares to 14 000 listed companies in the US. 
According to 2009 data from FESE, SMEs with a market capitalisation of up to €1billion represent 86% 
of  listings  of  regulated  markets  in  terms  of  number,  but  only  14%  and  4%  in  terms  of  trades  and 
turnover respectively.  
i.e. for every Euro invested through CIP, about €30 are finally obtained by the beneficiary  

EN 

4 

   EN 

 
                                                 
risk-sharing operations. In 2009, the EIF launched the €1 billion Mezzanine Facility 
for Growth to be invested in hybrid Debt /Equity funds throughout Europe, for high 
growth  SMEs  and  Midcaps,  with  a  view  to  playing  a  catalytic  role  in  this  market 
segment. This facility is expected to be fully committed by 2012.  

Moreover,  EU  Structural  Funds  also  offer  SMEs  access  to  financing  through  the 
JEREMIE initiative and are expected to continue doing so in the next programming 
period  2014-2020.  JEREMIE,  Joint  European  Resources  for  Micro  to  Medium 
Enterprises,  is  an  initiative  of  the  Commission  developed  together  with  the  EIF  in 
order  to  promote  the  use  of  financial  instruments  to  improve  access  to  finance  for 
SMEs via Structural Funds interventions. 

Cohesion policy does not finance individual projects directly at the EU level, instead 
it funds multi-annual national or regional operational programmes  aligned with EU 
objectives  and  priorities  and  managed  by  national  or  regional  authorities  ("shared 
management").  In  the  framework  of  2007-2013  operational  programmes,  Member 
States  and  regions  can  use  financial  instruments  to  finance  SMEs  by  means  of 
repayable  forms  of  assistance  such  as  equity  investments,  loans  or  guarantees. 
Resources invested in or paid to SMEs and paid back by them shall be subsequently 
reinvested by the Member States or the regions again for the benefit of SMEs. Where 
the  managing  authorities  decide  to  use  financial  instruments  to  support  enterprises, 
they contribute resources from an operational programme to a holding fund ("fund of 
funds")  or  directly  to  financial  engineering  instruments  ("specific  funds)"  such  as 
venture  capital  funds,  loan  or  guarantee  funds  ("financial  intermediaries").  Special 
emphasis  is  given  to  supporting  the  growth  and  jobs  agenda,  by  emphasising 
technology transfer, innovation, start-ups, and micro credit. 

At  end  2010,  an  aggregate  amount  of  €8.4  billion  of  the  European  Regional 
Development  Fund  (ERDF)  and  national  contributions  (private  and  public)  was 
estimated to be committed to 386 funds, whether through holding funds or directly to 
specific funds. The ERDF part of the resources committed to all funds amounted to 
€6.2  billion.  At  end  2010,  assistance  to 
enterprises  provided  through  equity 
investments,  guarantees  and  loans  is  estimated  to  amount  to  at  least  €3  billion. 
Resources leveraged at the level of enterprises, in addition to the resources allocated 
through  operational  programmes  but  which  complement  ERDF  and  national 
contributions to specific funds, amounted to €4 billion. 

In  addition  to  the  use  of  Structural  Funds,  access  to  finance  for  agricultural  SMEs 
and rural micro-businesses is facilitated by the European Agricultural Fund for Rural 
Development  (EAFRD)  where  various  financial  instruments  (such  as  loan  and/or 
guarantee funds) are developed in the context of the rural development programmes. 
At present, more than €550 million are allocat ed by Member States for such type of 
operations in the current programming period. 

EN 

5 

   EN 

 
Annex 1: Current key EU measures to facilitate access to finance for SMEs  

1.  Current  EU  financial  measures  for 

SMEs (2007-2013) 

2.  Current measures to facilitate access 

to mezzanine financing  

3.  Current measures to facilitate access 

to risk capital  

4.  Current  measures 
financial stability  

to 

increase 

5.  Current  measures 
accounting rules  

to 

simplify 

The financial instruments of the Competitiveness and 
Innovation Framework Programme (CIP) with a budget 
of €1.1billion will enable financial institutions to 
provide about €30 billion of new finance 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 assistance to enterprises 
through equity investments, guarantees and loans under 
structural funds. In the current financial period the 
measures are estimated to amount to at least €3 billion. 
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.  
In 2009, the EIF launched the €1 billion Mezzanine 
Facility for Growth to be invested in hybrid Debt 
/Equity funds throughout Europe, for high growth SMEs 
and Midcaps, with a view to playing a catalytic role in 
this market segment. This facility is expected to be fully 
committed by 2012.  
In 2011 the EIB group has increased its Risk Capital 
Mandate to €5 billion and ex tended the scope to include 
co-investing with business angels.  
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.  
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.  
In order to simplify accounting rules for SMEs and 
further reduce their administrative burden, the 
Commission adopted a proposal for a Directive on the 

EN 

6 

   EN 

 
annual financial statements, consolidated financial 
statements and related reports of certain types of 
undertakings 17 which could allow SMEs to save up to 
€1.7 billion per year. 

17 

COM(2011) 684 final 

EN 

7 

   EN 

 
                                                 
Annex 2: EU Action Plan to improve access to finance for SMEs: List of actions  

Key measures to facilitate access to finance for SMEs in the short-term (2011-2013) 

6.  A 

new  EU 

venture 

capital 

framework 

7.  Review state aid rules impacting risk 

capital 

8.  Improving  the  visibility  of  SME 

growth markets 

9.  Increasing visibility of listed SMEs 

10. Reducing 

reporting  burdens 

for 

listed SMEs 

11. Reducing issuance costs 

12. Review  the  impact  of  bank  capital 

requirements on SMEs 

13. Support  by  EIB  Group  to  improve 

lending to SMEs 

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

internal  market 

for  VC 

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.  

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 

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. 

In  October  2011,  a  legislative  proposal  revising  the 
Transparency  Directive  was  made 
the 
regulatory  burden  for  small  issuers.  The  Commission 
invites  the  Parliament  and  the  Council  to  adopt  the 
legislative proposal by end 2012.  

to  reduce 

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. 

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.  

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, 

EN 

8 

   EN 

 
 
 
 
 
including for the securitisation of portfolio of SME debt, 
partly in cooperation with the Commission.  

14. Support  by  EIB  Group  to  venture 
capital and other risk financing 

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.  

15. Better information for SMEs 

The Commission will  

a)  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 

b) 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;  

c)  Member  States’  authorities  are  encouraged  to  create 
similar  single  online  databases  of  national  and  regional 
sources of finance.  

in  cooperation  with 

The  EIB  Group, 
financial 
intermediaries, will expand SMEs’ access to information 
about the various EU financial instruments. Efforts will 
be  made  to  simplify  the  administrative  burden  and 
broaden the scope of language.  

16. Facilitate  access  to  EU  financial 

instruments 

17. Stimulate  the  activity  of  “Business 
cross-border 
and 

angels” 
investments 

further  encourage  co-
a)  The  Commission  will 
investments  with  business  angels  in  different  forms  in 
co-operation with the EIF and Member States within the 
possibilities under Structural Funds. 

18. Promote  SMEs’  access  to  capital 

markets 

b)  The  Commission  will  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.  

c) The Commission will improve the matching of offers 
and  requests  for  venture  capital  within  the  Enterprise 
Europe Network 

a)  The  Commission,  together  with  the  stakeholders  in 
the  SME  Finance  Forum,  will  continue  to  contribute  to 
information  campaigns  regarding  access  to  capital 
markets  by  SMEs  and  prepare  a  European  information 
guide for companies aspiring to go public.  

b)  Stakeholders  and  stock  exchanges  in  particular  are 

EN 

9 

   EN 

 
encouraged to increase their information to SMEs about 
the advantages of a market listing.  

c) The Commission will consider how to promote access 
to SME bond markets and securitisation.  

d)  The  Commission  will  increase  awareness  of  stock 
listing by promotional activities such as an award for the 
SME listing of the year. 

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

EN 

10 

   EN 

 
 
Other measures to facilitate access to finance for SMEs in the short-term (2012-2013) 

19. Improve  the  regulatory  framework 
for investment in venture capital  

20. Taxation reforms benefiting SMEs  

21. Accelerate the implementation of the 

Late Payments Directive 

22. An  innovative  regime  for  European 

Social Entrepreneurship Funds 

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 
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. 

Insurance 

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. 

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

The Commission is presenting a new and uniform set of 
rules  on  "European  Social  Entrepreneurship  Funds". 
These  rules  will  enable  EU  investment  funds  to  raise 
capital  from  private  investors  across  the  EU,  using  a 
specific  and  distinctive  label.  The  Commission  invites 
EP and Council to adopt this new regulation before the 
end of 2012 

23. Improve  monitoring  of  the  SME 

lending market  

24. Promoting  the  use  of  EU  financial 

instruments  

25. Facilitate access to microfinance  

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

lending  striving 

for  SME 

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.  

26. Promote qualitative rating 

The  Commission  will  promote  the  exchange  of  good 
practice  and  encourages  the  banking  sector  and  SME 

EN 

11 

   EN 

 
 
 
 
 
27. Better 
banks  

information 

to  SMEs  by 

28. Encourage 

the  establishment  of 

national SME Finance fora  

29. Encourage  the  drafting  of  national 
guidelines  to  increase  transparency 
in the lending process 

federations to promote the use of qualitative rating as a 
tool to complement the standard quantitative assessment 
of SMEs’ creditworthiness. 

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.  

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 
are  encouraged  to  establish  national  codes  of  conducts 
and  guidelines  to  improve  transparency  in  the  lending 
process  and,  if  appropriate,  support  credit  mediator 
functions. 

30. Review 

mechanisms 
practices 

the 
concerning 

transparency 
lending 

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. 

EN 

12 

   EN 

 
 
 
 
Measures to facilitate access to finance for SMEs in the long-term (2014-2020) 

31. Proposal  of  EU  Debt  Financial 
Instrument  for  enterprises'  growth 
and research and innovation 

32. Proposal  of  an  EU  Equity  Financial 
enterprises' 

Instrument 
for  EU 
growth and research and innovation 

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 Commission has proposed: 

reinforced  and  expanded  equity 

1.  A 
financial 
instrument  to  improve  SMEs'  access  to  venture  capital 
their  early  stage 
and  other  risk  financing,  from 
(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. 

EN 

13 

   EN