Investment & Fund Management
The European Investment
Full Credential Description
The European Investment Fund (EIF) and BPI signed a guarantee agreement to support lending to small and medium-sized enterprises (SMEs) in Portugal under the Risk Sharing Instrument (RSI). This initiative addresses the critical need for innovative companies to access financing, particularly in a challenging economic environment. The RSI allows BPI to provide up to EUR 60 million in debt finance over two years, backed by a 50% guarantee from the EIF. This agreement marks the first RSI implementation in Portugal and the tenth across Europe, contributing to a total loan finance pool of nearly EUR 1 billion for innovative businesses in the EU.
The primary challenge faced by SMEs in Portugal was the difficulty in securing investment financing and operating capital necessary for research, development, and innovation activities. The RSI aims to mitigate this issue by encouraging banks to lend to SMEs and small mid-caps with fewer than 500 employees. The EIF's involvement, through its risk-sharing capacity, enables BPI to offer more favorable financing conditions to these businesses, thereby facilitating their growth and innovation.
As a result of this partnership, BPI is positioned to significantly enhance its support for innovative SMEs, which is crucial for Portugal's economic recovery. The initiative not only strengthens BPI's role in the financial market but also underscores the effective collaboration between the EIF and BPI in providing essential funding to drive SME investments in the region.