The EIB reiterates its commitment to job creation by granting Spain the biggest loan for SMEs
The European Investment Bank (EIB) has granted Instituto de Crédito Oficial (ICO) a one billion euro loan which aims to ease access bank funding for SMEs (up to 250 employees) and, to a lesser extent, mid-cap companies (up to 3,000 employees). This is the largest loan the EIB has ever granted to a financial institution in the European Union to fund investments made by SMEs.
The loan agreement highlights the commitment of the EIB and ICO to small and medium-sized companies as fundamental source of job creation and growth, providing significant funding with favourable terms and interest rates. ICO will supplement the funds obtained from the EIB for SMEs with an equivalent amount in loans, bringing the total amount available to SMEs funding to two billion euros.
The loan will mainly be used to finance investment projects in the primary, industrial and services sectors and will enable organisations to preserve and create jobs. The funds will be used to finance companies' medium and long-term investments, as well as covering working capital needs. It is estimated that around 45% of the total loan amount will be earmarked for projects in convergence regions.
ICO will channel a considerable amount of the EIB loan through medium-sized regional banks, or those that do not have direct lines with the EIB. The aim of using such intermediaries is to make it easier to provide credit to SMEs and medium-sized companies that are clients of these financial institutions, broadening the coverage to virtually the whole country and every sector of the end beneficiaries.
The loan agreement was signed in Madrid by the Vice-President of the EIB, Magdalena Álvarez and ICO Chairman, Román Escolano. The Vice-President of the EIB pointed out that "this operation represents another step in our work to support small and medium-sized enterprises in Spain which are the cornerstone of the country's production industry and are essential to reactivating growth and job creation". She added that, "The importance of this loan not only lies in its size, being the largest granted to a European financial institution, but in the fact that we will be able to reach more banks and SMEs as a result of the invaluable cooperation of ICO, which will multiply the positive effects of this credit facility".
At the signing ceremony, the ICO Chairman said, "This important injection of funds to Spanish companies coincides with an upturn in the country's main economic indicators and the return of confidence in Spain by foreign economic agents".
With the loan agreement signed today, the EIB has granted around 9,000 million euros for projects in Spain since the beginning of the year, of which approximately 4,500 million has been allocated to finance investment by Spanish SMEs, almost doubling the support provided to this sector last year.
About the European Investment Bank (EIB):
The European Investment Bank (EIB) is the European Union's long-term lending institution, owned by member states. It provides long-term funding to viable investment projects in order to help achieve EU policy objectives.
About Instituto de Crédito Oficial (ICO):
Instituto de Crédito Oficial is a state-owned bank structured as a public sector company, belonging to the Ministry of Economy and Competitiveness via the State Secretariat for Economy and Enterprise Support. It has the legal status of a credit institution and is considered a state financial agency. As a state-owned bank, ICO grants loans to fund investment operations and provide liquidity to companies, both in Spain and abroad, either through intermediary financial institutions or direct financing. Moreover, as a state financial agency, ICO manages the official funding instruments that the Spanish state provides to promote exports and support development.