The EU's Cultural and Creative Sectors Guarantee Facility, which is managed by the EIF, is now active in Italy for the first time thanks to a new initiative launched with Italy's national promotional institution Cassa Depositi e Prestiti (CDP). The agreement between CDP and the EIF is expected to provide EUR 200 million in counter-guarantees for Italy’s Guarantee Fund for SMEs, substantially increasing its current guarantee capacity. Thanks to this EU support, up to EUR 300 million of loans to SMEs in the creative and cultural sectors are expected to be provided.
The initiative supports and promotes the issuance of new loans to enterprises in various fields, including cinema, theatre, TV, publishing and architecture. It is estimated that within the next six months around 900 borrowers will already gain access to bank loans counter-guaranteed by the CCS Guarantee Facility. Over the next two years, the initiative will target around 3,500 SMEs which, thanks to the counter-guarantee scheme, will benefit from about EUR 300 million in new debt financing. This is the largest initiative in terms of access to finance ever launched to date within “Creative Europe”.
Mariya Gabriel, Commissioner for Digital Economy and Society, and Tibor Navracsics, Commissioner for Education, Culture, Youth and Sport, said: "Culture and the creative sectors build bridges between art, business and technology. They are a catalyst for innovation and foster risk-taking attitudes, which are key in building resilience. Helping these companies scale up and stimulate creativity is high on the European Commission's agenda. This guarantee agreement helps to bridge the financing gap faced by these sectors and will have important economic and social benefits."
“The new operation is the result of the continued collaboration between CDP and national and European institutions, and represents a major growth opportunity for an entrepreneurial macro-sector that, at Community level, employs more than 7 million people and accounts for more than 4% of GDP.” said CDP Chief Executive, Fabrizio Palermo. “We are pleased to enable the deployment in Italy, for the first time, of the European Commission’s Creative Europe programme's funds that, through the Guarantee Fund for SMEs, will enhance access to credit by Italian enterprises in the cultural and creative sectors.”
“With the increase of the available resources, the operation, which was made possible by the continuous and profitable collaboration between Mediocredito Centrale and CDP, strengthens the effectiveness of the Guarantee Fund for SMEs, one of the most significant tools to facilitate access to credit for small and medium-sized enterprises in Italy.” said Chief Executive of Mediocredito Centrale - Banca del Mezzogiorno, Bernardo Mattarella. “The initiative will give further support to companies operating in the cultural and creative sector, which is very important for the growth of the country.”
EIF Chief Executive, Pier Luigi Gilibert, said: “I am delighted to announce the first transaction in Italy under the Cultural and Creative Sectors Guarantee Facility with CDP today. CDP is our long-term trusted partner and the new initiative today is the result of strengthened collaboration in the area of SME support. Access to finance is very often limited for companies in the cultural and creative sectors and this new initiative will help to provide much needed finance to these SMEs.”
Access to finance in the creative and cultural sectors can be difficult to obtain, primarily due to the intangible nature of their assets and collateral, the limited size of the market, demand uncertainty, and lack of financial intermediary expertise in addressing sector specificities.
This agreement falls within the “Risk-sharing Platform for SMEs” structured by CDP together with the EIF, which is supported by the Juncker Plan’s European Fund for Strategic Investments.
How to apply
SMEs in the cultural and creative sectors who intends to employ the SME Fund to finance their investment plans and/or working capital needs, can turn to their own bank or Confidi. They will submit the application to the SME Fund on their behalf, which will be processed on average within one working week). For more information please visit: www.fondidigaranzia.it
About the EIF
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.
About the Cultural and Creative Sectors Guarantee Facility and Creative Europe
Set up under the cross-sectoral strand of the Creative Europe programme, the Cultural and Creative Sectors Guarantee Facility is the first EU investment instrument with such a wide scope in the culture and creative sectors. It pursues the same objective as the SME window of the European Fund for Strategic Investments (EFSI), which drives the Investment Plan for Europe: increasing lending to SMEs to enable them to scale up their activities.
Creative Europe is a 7-year programme (2014-2020) designed to support the creative and cultural sectors. It has a budget of EUR 1.46 billion for the whole duration of the period. It is composed of the MEDIA sub-programme, helping the development and the distribution of European audio-visual works, the Culture sub-programme, which supports culture sector initiatives promoting for example cross-border cooperation or platforms for emerging artists, and the cross-sectoral strand. The objective of Creative Europe is to promote cultural diversity, encourage the circulation of European culture and creativity and strengthen the competitiveness of the cultural and creative sectors.
About the Investment Plan for Europe
The Investment Plan for Europe, the Juncker Plan, is one of the EU´s top priorities to boost investments and to create jobs and growth by removing obstacles to investment, providing visibility and technical assistance to investment projects, and making smarter use of existing and new financial resources. With guarantees from the European Fund for Strategic Investments (EFSI), the EIB and EIF are able to take on a higher share of project risk, encouraging private investors to participate in the projects. The European Parliament and Member States agreed in December 2017 to extend EFSI's duration and increase its financial capacity. As of July 2018, the Juncker Plan is set to trigger more than EUR 335 billion in investment across the EU.
Cassa depositi e prestiti (CDP) is the National Promotional Institution that has supported the Italian economy since 1850. It finances public investments and the development of the Country’s infrastructure system; it backs Italian enterprises, helping them innovate and grow, while fostering their exports and international expansion. It supports international cooperation and acts as a catalyst for Juncker Plan’s funds in Italy. As the primary operator in social and affordable housing, CDP contributes to the growth of the Italian real estate sector and promotes urban transformation. More info at: http://en.cdp.it.
About Italy's Guarantee Fund for SMEs
Italy's Guarantee Fund for SMEs, managed by Mediocredito Centrale on behalf the Italian Ministry of economic development, is the major national aid instrument for enterprises, with the mission to support access to credit by SMEs through direct guarantees to banks or counter-guarantees to Confidi. The guarantee can cover up to 80% of the loan and allows banks and Confidi to improve the financial conditions applied to the borrowers (e.g. in terms of loan amount, required collateral, interest rate levels).
Operational since the year 2000, the Fund has progressively increased its activity, with a strong boost in recent years. Solely in 2017, it has approved around 120,000 guarantee applications submitted by more than 78,000 enterprises, which had access to “first demand” guarantees on EUR 17.5 billion of new financing. As of the end of July 2018, since the start of operations, the Fund has approved more than 828,000 guarantee applications in favour of around 400,000 enterprises, equalling an overall amount of EUR 78.8 billion in issued guarantees.
3 September 2018