Investment & Fund Management
The European Investment
Full Credential Description
The European Investment Fund (EIF) and Germanys KfW Group collaborated to support small businesses in the UK through a pioneering securitisation of Funding Circle loans. This transaction marked the first of its kind in Europe, effectively opening up small business lending as a new asset class for a broader range of investors. The initiative aimed to provide an alternative financial instrument that would enhance lending to small businesses, thereby reducing their reliance on traditional bank loans, a strategy endorsed by both the Bank of England and the European Central Bank.
The tailored solution involved the EIF's significant support for Funding Circle, one of the largest peer-to-peer lending platforms in the UK. By facilitating this securitisation transaction, the EIF and KfW aimed to stimulate SME lending through capital markets, thereby increasing the availability of finance for small and medium-sized enterprises. This innovative approach was designed to help Funding Circle expand its loan offerings, ultimately benefiting small businesses across the UK.
As a result of this collaboration, Funding Circle has facilitated $2.2 billion in lending to businesses globally, establishing itself as one of the largest net lenders to small businesses in the UK. This landmark transaction not only provided immediate financial support to SMEs but also set a precedent for future securitisation efforts in the European market, demonstrating a commitment to enhancing access to finance for small businesses.