EIB and Santander provide EUR 500 million to finance SMEs

The European Investment Bank (EIB) and Banco Santander will provide financing to Spanish SMEs through an innovative instrument that enables the two institutions to share the risks. The agreement, signed in Madrid by EIB Vice-President Emma Navarro and Santander España’s CEO Rami Aboukhair, is backed by the Investment Plan for Europe.

Under this financing facility, the EIB will participate in a EUR 250 million portfolio of corporate loans and Banco Santander will be able to provide EUR 500 million of financing for the investments of small and medium-sized enterprises.

Thanks to the EIB’s participation, Banco Santander will, therefore, expand its capacity to grant loans to finance new investments by SMEs, which will benefit from the EIB’s favorable financing conditions in terms of both maturity and interest rates. The EU bank’s objective is to contribute to boosting the competitiveness of Spanish businesses through this agreement, thereby stimulating economic growth and job creation.

The loan is supported by the Investment Plan for Europe, which enables the EIB to finance projects that have a particular added value and a higher risk profile owing to their structure or nature. In this case, the backing of the Juncker Plan has helped to develop an innovative financing instrument to underpin the new investments of small and medium-sized enterprises and unlock private capital.

At the signing ceremony, EIB Vice-President Emma Navarro said: “Ensuring that SMEs have the financing they need to invest in enhancing their competitiveness is one of the EIB’s priorities. We are therefore delighted to be signing an agreement which demonstrates via its innovative character the EIB’s determination to find new ways of ensuring that small and medium-sized enterprises continue to benefit from the advantages of our financing. Last year, 57% of our total financing in Spain went to SMEs.”

This agreement is the second of this kind to be signed between the EIB and Banco Santander. The previous operation, also granted under the Investment Plan for Europe, has already assisted more than 3 500 businesses. The average loan to beneficiary SMEs under this agreement was EUR 180 000, and more than 30% of the companies benefiting from it are located in convergence regions.

Original source: EIB
Published on 31 July 2018