Small firms demand EIB pledge

Date: 29/06/2000

By Renée Cordes

Europe's small and medium-sized enterprises and the European Commission are insisting the European Investment Bank must make a formal commitment to continue SME programmes previously run by the smaller European Investment Fund when it takes control of the fund.

Last week, the EIB - the EU's long-term lending arm - became the majority shareholder in the EIF, which was set up in 1994 to promote investment in energy, transport and telecoms and to provide loan guarantees and other financing for small firms.

EIB President Philippe May-stadt said the main purpose of the change was to eliminate the duplication of tasks in the two Luxembourg-based institutions. In future, the EIF will concentrate solely on providing risk capital for start-up firms and hand over the rest of its activities to the larger institution.

But Europe's main SMEs lobby group UEAPME and the Commission fear that unless the EIB promises to continue some of the SME programmes run by the EIF, many of these may be lost. These include the Growth and Environment Scheme, which provides small firms with loans on beneficial terms for investments which produce significant environmental benefits, even if that is not their main business activity.

UEAPME is also urging the EIB to draw up concrete plans to implement the provisions of the small business charter agreed by EU governments earlier this month in Feira. "The EIB has to demonstrate to us that it is the appropriate mechanism of a public funding institution with private sector influence to provide the best access to finance for SMEs," said spokesman Garry Parker.

EIB sources insisted that the institution had no plans to abandon the SME activities previously conducted by the fund, saying it would take a "business as usual" approach.

Europe's small and medium-sized enterprises and the European Commission are insisting the European Investment Bank must make a formal commitment to continue SME programmes previously run by the smaller European Investment Fund when it takes control of the fund.