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EUROPEAN INVESTMENT BANK

EUROPEAN INVESTMENT BANK. CARIFORUM Meeting of Business Support Organisations Kingston, Jamaica, March 28 th and 29 th Funding Opportunities for the Private Sector. 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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EUROPEAN INVESTMENT BANK

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  1. EUROPEAN INVESTMENT BANK CARIFORUM Meeting of Business Support Organisations Kingston, Jamaica, March 28th and 29thFunding Opportunities for the Private Sector European Investment Bank

  2. Contents:1. The European Investment Bank (EIB) 2. The EIB in the Caribbean 3. The EIB and SMEs access to finance European Investment Bank

  3. 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. European Investment Bank

  4. STRATEGIC FOCUS - public & private companies - - Financial Intermediaries - European Investment Bank

  5. Infrastructure and SMEs European Investment Bank

  6. 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%. European Investment Bank

  7. 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). European Investment Bank

  8. Value Added • 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. European Investment Bank

  9. Long term lines of credit EIB Global Loan Commercial Bank / Microfinance institution Sub-loans A B C F Micro, Small and Medium sized Enterprises: A to…F Finance for growth and Finance for all. European Investment Bank

  10. 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 European Investment Bank

  11. 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). European Investment Bank

  12. 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. European Investment Bank

  13. 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). European Investment Bank

  14. 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. European Investment Bank

  15. 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 ? European Investment Bank

  16. 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: y.ferreira@eib.org EIB Website: http://www.eib.org European Investment Bank

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