Bankinter and the EIF sign the first InnovFin guarantee contract in Europe under Horizon 2020 to finance innovative companies.
The European Investment Fund (EIF) and Bankinter have signed an agreement to increase lending to innovative small and medium-sized enterprises (SMEs) as well as Small Mid-caps under InnovFin - EU finance for innovators, an initiative supported by the European Commission on behalf of the EU.
The new agreement allows Bankinter to provide innovative companies in Spain with access to a total of EUR 200m of financing for the next 2 years the with support of a guarantee provided by the EIF and backed under Horizon 2020, the EU Framework Programme for Research and Innovation. The deal enables Bankinter to offer innovative companies additional financing at favourable conditions.
Commenting on the signature, Marjut Santoni, EIF Deputy Chief Executive said: "This pioneering deal marks a significant step in the European Union's efforts to increase access to finance for innovative businesses across the EU and we are delighted to be signing it in Spain with Bankinter. We are very pleased with the results from the Risk Sharing Initiative agreement which we signed with Bankinter two years ago and are convinced that we will be able to support even more businesses in the next 2 years".
Jacobo Díaz, Director of Products and Innovation at Bankinter added: "Here at Bankinter we continue to support viable projects which will contribute to our productive sector and also the sustainability of companies and to the creation of jobs. In the last 12 months our SME credit portfolio has increased by 6.9% and the agreement with the EIF will allow us to continue increasing our support for innovative SMEs".
European Research, Innovation and Science Commissioner Carlos Moedas said: "With this signature we have started to deliver our promise to stimulate private investment for sustainable growth creation and a more competitive Europe. This agreement is a first of many that will help SMEs and small midcaps across the EU finance innovation".
The aim of the InnovFin SME Guarantee is to encourage banks or other financial institutions to lend to SMEs and small mid-caps (firms with fewer than 500 employees) in need of investment and/or operating capital to finance research, development and innovation activities, with EU financial support. Financial institutions are being selected by the EIF following a call for expression of interest for financial intermediaries across Europe.
The European Investment Bank (EIB) is also in advanced discussions with Bankinter and is expected to finalise a EUR 200m Credit Facility in the coming months which could also be combined with the InnovFin guarantee agreement, hence further enhancing access to finance for innovative businesses in Spain.
About InnovFin SME Guarantee.
InnovFin SME Guarantee provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million, in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The InnovFin SME Guarantee is implemented by the European Investment Fund, and will be rolled out through financial intermediaries (banks and other financial institutions) in EU Member States and Associated Countries. Under the InnovFin SME Guarantee, financial intermediaries will be guaranteed by the EIF against a proportion of their losses incurred on the debt financing. InnovFin SME Guarantee is part of InnovFin - EU Finance for Innovators, a new range of EIB Group (including EIF and EIB) products to facilitate access to finance for innovative businesses. This transaction is supported with the financial backing of the European Union under Horizon 2020 Financial Instruments.
About the EIF.
The European Investment Fund's (EIF) 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. EIF's total net commitments to private equity funds amounted to over EUR 7.9bn at end 2013. With investments in over 435 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF's guarantees loan portfolio totalled over EUR 5.6bn in over 300 operations at end 2013, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
About Bankinter.
During the previous programming period, Bankinter approved 340 loans, for a total of €160 million under the RSI programme. It's one of the most solvent and healthy financial institutions in Europe, as shown in recent stress tests that the ECB and the European Banking Authority (EBA) conducted on European banks. Bankinter is the listed Spanish bank that obtained the best results in these tests, passing the most adverse scenario in the tests with a 10.99% CET1 capital ratio, which is double the required minimum capital. In the first nine months of the year Bankinter had a net profit of 205.1 million euros (up 31.6% on the previous year), is likewise a benchmark institution in the financial market due to its high level of technological development, a clear dedication to innovation and the development of alternative channels in its relationship with its customers.
About Horizon 2020.
On 1 January 2014, the European Union launched a new research and innovation funding programme called Horizon 2020. Over the next seven years almost €80 billion will be invested in research and innovation projects to support Europe's economic competitiveness and extend the frontiers of human knowledge. The EU research budget is focused mainly on improving everyday life in areas like health, the environment, transport, food and energy. Research partnerships with the pharmaceutical, aerospace, car and electronics industries also encourage private-sector investment in support of future growth and high-skilled job creation. "InnovFin - EU Finance for Innovators", the new generation of EU financial instruments and advisory services was developed under Horizon 2020 to help innovative firms access finance more easily. "InnovFin - EU Finance for Innovators" will help to inject up to EUR 48 billion in investments in Research and Innovation across Europe.