EUROPEAN INVESTMENT BANK
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Transcript of EUROPEAN INVESTMENT BANK
European Investment Bank 1
CARIFORUM Meeting of Business Support Organisations
Kingston, Jamaica, March 28th and 29th
Funding Opportunities for the Private Sector
EUROPEAN INVESTMENT BANK
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Contents:
1. The European Investment Bank (EIB)
2. The EIB in the Caribbean
3. The EIB and SMEs access to finance
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1. The EIB, the EU Bank
European Union’s long-term financing institution set up in 1958 by the Treaty of Rome.
Shareholders: 27 EU Member States
Lending in 2010:
• European Union: EUR 63 bn
• Outside the EU: EUR 8.8 bn
• Total lending: EUR 71.8 bn
• Borrowings : EUR 67 bn
Broad range of financial instruments: from senior loans to equity. Also TA facilities.
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Infrastructure Financial sector
STRATEGIC FOCUSSTRATEGIC FOCUS
Energy Water Transports SMEs MicroEs
- Financial Intermediaries - - public & private companies -
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Infrastructure and SMEs
Competitive SMEs
Job creation&
Economic Growth
Reliable & affordable Electricity, Water, Telecom, Roads, Ports & Airports services
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2. The EIB in the Caribbean
Cumulative signatures as at 31/12/2010 represented EUR 1.338 million under the successive Lomé and Cotonou conventions.
Total signatures under Cotonou (2004-2010) EUR 361 million or an average of EUR 52 million per annum.
Financial sector (GLs + Equity Funds) 61%, Transport 18%, Energy 14%, Tourism 7%.
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EIB and the Caribbean Financial Sector
Strong links with regional (CDB, IADB, DFL, CSFC) and national development banks (AIDBANK, DBSKN).
But also fructuous cooperation with indigenious banks and financial institutions (Banco BHD, Banco Leon, Banco Popular, Sofihdes, NCBJ, PanCaribbean and BOSL).
EIB was instrumental in the development of Microfinance institutions in the Dominican Republic (Ademi, Fondesa and Adopem) with equity, loans and T.A.
Participation in various equity funds with a national or regional focus (AIC Fund).
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Access to attractive long and medium term funding and regulatory capital.
Interest subsidies when justified (environmental & social investments).
Technical assistance to support capacity building.
Promotion of best practises.
Value Added Value Added
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Long term lines of credit
EIB
Commercial Bank / Microfinance institution
A B C F
Global Loan
Sub-loans
Micro, Small and Medium sized Enterprises: A to…F
Finance for growth and Finance for all.
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4.The EIB and SMEs access to finance
Obstacles to SME access to financing
Insufficient collateral / Capital base
Volatile pattern of growth and earnings
High risk profile / mortality rate
Gaps in the legal and regulatory framework
Incomplete range of services by Financial Institutions
Weaknesses in information provision by SMEs
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The EIB and SMEs access to finance
► Apart from providing Financial Intermediaries with funding for on lending (or investment) to SMEs the EIB can also mobilize TA grant funding.
► TA operations aim to (i) enhance project quality and success rate (ii) increase efficiency and (iii) complement other financial products.
► In the Financial Sector, TA can be targeted at Financial Intermediaries capacity building but also Final Beneficiaries (MSMEs).
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TA and SMEs access to finance
TA can finance :
. the establishment of dedicated business units to serve the SME segment.
. the extension of operations into new geographic areas (ex rural districts).
. the development of new products both on the lending and deposit side for the SME clientele (ex. leasing).
. financing the delivery of advisory services for applicants/customers.
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Advisory Services for SME applicants
◊ Support to business plan preparation.
◊ Advise and counselling to investors during investment and operation phase.
◊ Development and application of management system packages (accounting, IT, HR, quality, strategic business planning).
◊ Referral specialist support (technology, export market, research).
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Concluding remarks
◊ Large and well established companies have access to Commercial Banks financing including for long maturities.
◊ Commercial banks are more reluctant to finance Infrastructure and SMEs. Thus, the catalytic role of Multilateral Development Banks.
◊ When dealing with SMEs, finance is sometimes not enough. TA can improve quality of the deal flow and reduce mortality rates.
◊ EIB has established on the 24/3/2011 with Center for Development of Enterprises, a EUR 1 million “SME Access to Finance Facility in the Caribbean” (SAFFC) for pre and post investment support and capacity building.
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Concluding remarks (2)
◊ EIB is ready to look at a similar partnership with CADE targeting export oriented SMEs with finance and T.A .
◊ How could BSOs be associated to these different initiatives for the benefit of their members ?
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Thank you for your attention
Yves Ferreira
Head of the Regional Representation in the Caribbean------------------------------------------------------------------------------
European Investment Bank 1, Boulevard Général de Gaulle, F – 97200 Fort-de-France, Martinique
Tel: (+596) 596 741 287 E-mail: [email protected]
EIB Website: http://www.eib.org