Investment Plan for Europe: EFSI deal in Hungary to provide HUF 50 billion / EUR 160 million for up to 2,000 agricultural SMEs
The European Investment Fund (EIF) and Agrár-Vállalkozási Hitelgarancia Alapítvány (AVHGA) have signed a COSME agreement in Hungary, benefiting from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe.
The new products will allow AVHGA to provide more than HUF 50 billion (ca. EUR 160 million) of financing with guarantees for up to 2,000 small businesses in Hungary primarily in the agricultural sectors. AVHGA can facilitate access to several forms of finance for SMEs, such as investment loans, working capitals, overdraft credits and bank guarantees. EIF will provide AVHGA with a counter-guarantee under the COSME programmewith financial backing from the European Commission allowing the organisation to launch new guarantee products to support SMEs that would otherwise not have received financing. The guarantee can be provided up to 90%.
European Commissioner for Education, Culture, Youth and Sport, Tibor Navracsics, said: "I am delighted to see that thanks to the Investment Plan launched by this Commission, small businesses in Hungary will now be able to obtain loans they would otherwise not have had access to. The Investment Plan has proven to be a success which is why we have proposed to increase both its financial capacity and duration. I encourage Hungarian businesses to make the most of this opportunity and use these loans to boost economic growth and job creation."
Commenting on the signature, EIF Chief Executive, Pier Luigi Gilibert, said:"I am pleased to be announcing this counter-guarantee agreement with AVHGA for the benefit of Hungarian entrepreneurs without sufficient collateral. The COSME products will help to provide support for SMEs in the agricultural sector, which would have had difficulties accessing finance on the market. This is our second EFSI deal in Hungary and I look forward to seeing the results of our agreements in the Hungarian SME area."
Herczegh András dr., Chief Executive at AVHGA, said: "The mission of AVHGA is to facilitate credit availability for SMEs that other financial institutions find too risky to finance. Regarding this agreement with the EIF, we will help even more businesses to access to credit in the field of agricultural and rural areas. Although in recent years the number of clients of AVHGA has doubled, there will be more financial room for manoeuvre thanks to the COSME programme in order to support SMEs. Furthermore the administration of guarantee applications will be simplified, and so the whole evaluation time will be remarkably shorter. We are working together with several national credit institutions to develop products with EIF counter-guarantee to satisfy the needs of businesses."
This transaction with AVHGA reflects the EU's commitment to rapidly launch concrete initiatives under the EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. More information on EIF's work under the EFSI is available here.
About the Investment Plan for Europe
The Investment Plan for Europe focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment projects. The Investment Plan is already showing results. The European Investment Bank (EIB) estimates that the projects and agreementsapproved for financing under the EFSI so far (by 26 September 2016) are expected to mobilise EUR 127.2 billion in total investments across 27 Member States and to support almost290,000 SMEs.
Building on this success, the European Commission on 14 September 2016proposed extending the EFSI by increasing its firepower and duration as well as reinforcing its strengths. Find the latest EFSI figures including a break-down by sector and by country here. For more information see the FAQs.
COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020 with a total budget of EUR 2.3 billion. At least 60% of the programme will be devoted to ease access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. This facility also includes securitisation of SME debt finance portfolios. The COSME programme also invests through the COSME Equity Facility for Growth in equity funds that provide risk capital to SMEs mainly in the expansion and growth stages. The COSME programme builds on the success of the Competitiveness and Innovation Framework Programme (CIP) (2007-2013) which helped to mobilise more than EUR 20 billion of loans and EUR 3 billion of venture capital to over 377,000 SMEs in Europe.
Businesses can contact selected financial institutions in their country to access EU financing: http://www.access2finance.eu/.
21 February 2018