The Role of Guarantee Institutions in Supporting European SMEs
Guarantee institutions play a crucial role in facilitating access to finance for SMEs in Europe. With 46 members across 31 European countries, these institutions provide new guarantee production, support SMEs with outstanding guarantee volumes, and offer dedicated products for sustainable and digital transitions. Major challenges faced by SMEs include the Covid-19 pandemic, war in Ukraine, ESG and digital transitions, and generational business transfers. The twin transition approach involves supporting SMEs with guarantees, advisory services, grants, loans, and equity to meet sustainability and digital innovation goals. Incentives for twin transitions include coverage, pricing, collateral requirements, and duration adjustments. Challenges lie in accurate classification and reporting for sustainability and climate tracking requirements.
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The role of Guarantee Institutions Katrin STURM, Secretary General, European Association of Guarantee Institutions Round Table EU Strategy on SMEs: Access to Finance , 08/06/2023
About AECM: Members + Partners AT AZ BE aws N BEG MCGF Brussels GF PMV Standaard- waarborgen WE BA GF Srpska BG NGF MGFSME HR HAMAG BICRO CZ NRB EE KredEx FI Finnvera FR Bpifrance EDC SIAGI SOCAMA DE GR VDB HDB TMEDE PL PT RO FGCR FNGCIMM FRC RS GF Vojvodina SI SEF SRDF ES CESGAR CH NSGI TR KGF TESKOMB UK BBB BGK BPF HU AVHGA Garantiqa IE SBCI IT Garanzia Etica ISMEA XK KCGF LV ALTUM LT INVEGA LU MC MPME MT MDB MD ODA NL RVO Partners: DAMU/KZ, EMGN, REGAR, SME Finance Forum
46 members About AECM: Statistics from 31 European countries bEUR i49.2 bEUR 267 kEUR new guarantee production 44.7average size of guarantee 5.2 dmillion outstanding guarantee volume supported SMEs Recent publications: Statistical Yearbook 2022 Ukraine Brochure Brochure on alternative guarantee instruments All data as of 31stDecember 2022 3
Multiplier effect 80% Hypothetical example X% 12,5% 50% 50% 5
Major Challenges for SMEs Covid-19 pandemic and war in Ukraine Twin transition: ESG and digital Generational transition: wave of business transfers SMEs need comprehensive financial and non-financial support 6
Twin transition Members offer large variety of dedicated products supporting SMEs sustainable and digital transition: Guarantees Advisory Grants Loans Equity At least 16 members offer dedicated products on sustainability and at least 17 on digitisation / innovation, others support twin transition via standard products 7
Twin transition Incentive lies in: Coverage Price Collateral requirements Duration Grant upon achievement of goals Big challenge: classification and reporting (e.g. InvestEU sustainability proofing and climate tracking, EIB Group Paris alignment annex, etc.) 8
Sustainable Guarantees Finnvera / Finland: Environmental Guarantee Bpifrance / France: Green Guarantee (upcoming) VDB / Germany: Creation and Growth Financing with Sustainability Bonus SBCI / Ireland: Energy Efficiency Loan Scheme KCGF / Kosovo: GROW Green Recovery BPF / Portugal: Fund for Social Innovation, Credit line for Decarbonisation and Circular Economy, Social Invest FNGCIMM and FRC / Romania: Garant Construct Programme GF Vojvodina / Serbia: Energy Efficiency Guarantee EIF / EU: Sustainability (Counter-)Guarantee 9
Sustainable Guarantees VDB / Germany: Creation + Growth Financing with Sustainability Bonus Promotional loan extended by house banks and guaranteed by Guarantee Bank of Baden-W rttemberg (GB BW) and L-Bank Loan amount between kEUR 20 and mEUR 5 Duration of up to 20 years with a maximum grace period of 3 years Interest rate reduction if climate targets are met, accompanied by a 15bps reduction of the guarantee fee Phase I: 5 bps reduction for measuring CO2footprint Phase II: 10 bps reduction for definition of CO2reduction targets and roadmap to get there Free assessment for applicants by consultants 10
Innovation / Digitisation Guarantees NRB / Czechia: SMART guarantee Bpifrance / France: Innovation guarantee, Guarantee France Num SOCAMA / France: Digitisation guarantee VDB / Germany: BBBW L-Bank Digitisation Premium Plus HDB / Greece: Innovation Guarantee Fund BGK / Poland: Guarantee for Investments, Innovations, Energy project for the Lower Silesian Voivodeship BPF / Portugal: Fund for Social Innovation FNGCIMM / Romania: Innovation Programme CESGAR / Spain: Elkargi Innovation Fund EIF / EU: Innovation and Digitalisation Portfolio (Counter-)Guarantee Product 11
Innovation / Digitisation Guarantees NRB / Czechia: SMART guarantee Support loans for digital transformation of SMEs Destination: purchase of new hardware, software and other tangible and intangible assets related to the digitisation of the business reorganisation and introduction of new procedures advice and training to improve digital skills of employees Coverage of up to 80% Maximum guaranteed loan amount of mCZK 4 (kEUR 169.3) Duration of up to 6 years No commission, no fee 12
Generational Transition VDB / Germany: Succession Monitor Study SOCAMA / France: Business Transfer Guarantee WE / Belgium: Chair and host of Transeo etc. 13
Diversification of financing Link 14
EU support Guarantee institutions provide required and impactful support to SMEs Need for EU support: Sufficient funding for counter-guarantees (e.g. InvestEU programme) Proportionate regulation (also in the area of ESG) State aid framework that allows the necessary support measures AECM Position on the SME Strategy 15
Many thanks for your attention ! European Association of Guarantee Institutions Avenue d Auderghem 22-28 B-1040 Brussels Phone: +32 (0)2 640 51 77 Mail: info@aecm.eu Twitter: @AECMeurope LinkedIn: AECM
