July 13, 2009
€228 million for entrepreneurs in Cyprus, €300 million for Dutch SMEs, and €200 million for a train in Spain: The European Investment Bank promised three quarters of a billion Euro in loans to help keep economies moving during the credit crunch – and that was just Friday!
The Bank has pledged to make €30 billion available to SMEs through (otherwise lending-shy) commercial banks in an effort to save European companies from bankruptcy – but amid the flurry of press releases, is the cash flowing to those who need it most?
The answer, at least in Ireland, is no. Groups representing small businesses say (a) banks are ‘obstructing‘ the efforts of the EIB and (b) most bank staff are not even aware of the supposedly SME-friendly credit facility trumpeted by Brussels. Banks appear to be making no major distinction between the criteria applied to normal lending and those that apply to EIB funds.
The EIB has exploded into a frenzy of hyperactivity since the credit crisis, spraying loans across Europe and beyond. After initial complaints that the organisation couldn’t handle such a sudden expansion of its remit, the Bank nows says it has the capacity to administer billions of Euro in loans and guarantees – in partnership with high-street lenders.
Still, it was interesting to note that when the new microcredit facility was unveiled earlier this month, it was made clear that the cash would be distributed through commercial banks and other non-profit institutions like trusts.
Are EIB funds getting through to companies in your country? Let me know…Author : Gary Finnegan