ICO's direct lending activity has increased in the first half of 2015
Instituto de Crédito Oficial (ICO) has lent €508 million in the first half of 2015 via its direct lending programmes (loans and guarantees). Direct loans have increased by more than five times the €92 million lent during the same period in 2014.
These programmes finance large investment projects for Spanish companies with international influence or projects of special interest for the Spanish economy. In both cases these are productive investments of more than €15 million for projects rolled out in Spain and €20 million for those abroad, preferably with joint finance from private financial institutions.
During the first half of the year, around 90% of direct lending was aimed at Spanish transactions, particularly in the telecommunications, infrastructures, energy and environmental sectors. For these transactions ICO studies, grants and assumes the credit risk of the transaction.
ICO Second-floor facilities
With regard to ICO's Second-Floor Facilities activities, loans were entered into for €5.984 billion in the first half of 2015.
ICO is adapting to the new conditions of recovery in the Spanish economy. It has played a counter-cyclical role in financing SMEs during the hardest years of the crisis and is now being replaced by private financial institutions which are standardising their offers of credit.
It is foreseeable that, during 2015, the grant of loans using ICO's Second-floor Facilities will reach the historical average volume seen in the years prior to the crisis.
Total financing via ICO's Second-floor Facilities has been entered into with 98,159 loan transactions to the self-employed and SMEs. These Facilities continue to be the core of ICO's new activity during the year.
The majority of ICO's financing has gone to the self-employed and micro-businesses (companies with 1 to 9 employees), with this segment accounting for 65% of operations carried out this year. Likewise, 54% of transactions were for less than €25,000.
During the first half of 2015, it can been seen that second-floor facilities (excluding the Short-term export facility) are evolving from financing liquidity to financing investment projects, making up 44% of the total, compared to 39% for the same period in 2014.
These data reflect the trend for increased demand for solvent credit by the Spanish self-employed and SMEs
With regard to the geographic distribution of the beneficiaries, businesses and the self-employed from the region of Catalonia were the main beneficiaries of ICO's second-floor facilities over this period, accounting for 14.35% of the total, followed by Valencia, at 13.21%, and Madrid, at 12.48%.
Of the total second-floor facilities, the SMEs and Entrepreneurs Facility, the purpose of which is financing productive investments and/or liquidity needs, was the most in demand, both for investment and liquidity purposes, with €3.982 billion granted via 71,914 loan operations.
This was followed by the facility offering short-term financing for businesses' export activities, which has granted €1.899 billion through 25,863 lending operations. It is noteworthy that this facility now represents 31.7% of the total volume granted via ICO facilities.
With respect to the activity sectors for the beneficiaries, industry stands out with 28.7% of the volume granted, followed by business, with 25.6%.
It should also be highlighted that in this half year the activity managed by ICO has grown by 6.9% compared to the same period in 2014, up to €177.003 billion.
The activity managed by ICO as a whole includes, apart from the loan investments shown on ICO's balance sheet, management of Funds on behalf of the Government, that is to say, the funds and instruments officially financing export and development, such as the Companies Internationalization Fund (FIEM), the Fund for the Promotion of Development (FONPRODE) and other financial instruments that the Institute manages for Regional and Local Authority financing by the Government. These are economical policy measures which contribute to improving the conditions for financing the economy.