Facilitating access to capital for SMEs

through stock markets, crowdfunding and

FinTech
10 April 2019
Brussels
Diego Valiante
DG FISMA
 CMU at the heart of key EU policy objectives

Growth & investment (3rd

Single Market
pillar of Juncker Plan)

Capital
Markets Union

EMU and international role Transformation

of the Euro (capital mobility (digitalisation & sustainable
and market integration) finance)

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 New European products, labels and passports Clearer and simpler rules for business and investors

Agreed : Agreed :
• European venture capital funds (EuVECA) • Prospectus Regulation
• STS Securitisation • Investment firms
• Pan-European Personal Pension Product • Preventive restructuring, 2nd chance
• Covered bonds • SMEs Growth Markets
• Cross-border distribution of investment funds

Pending : Pending:
• Crowdfunding • Third-party effects on assignment of claims

More efficient supervision of EU capital markets Sustainable finance

Agreed : Agreed :
• ESA review (including AMLD) • Low-carbon and positive carbon impact
• EMIR (supervision) • Disclosure

Pending :
• Taxonomy
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 Increasing SME access to finance

POLICY FIELD CMU ACTIONS

SME awareness and • Strengthened bank feedback

financial education • Information barriers

• Study on cross-border obstacles

Crowdfunding • Legislative proposal

• Venture Capital fund of fund

Venture capital • EuVECA
• Best practices in tax incentive schemes

• EU Growth Prospectus
IPO stage • SME Listing Package and Proposals

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 SME SEEKING LISTING ON CAPITAL MARKETS

• The number of IPOs on SME-dedicated markets has halved compared to

what it used to be before the financial crisis

• SME IPOs remain predominantly concentrated in one single junior market in

the UK

Evolution of
aggregated IPO
values and number
of IPOs on
European junior
markets since 2006

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Thank you!
EU access to finance policies and
financial instruments for SMEs

Armando Melone
DG for Internal Market, Industry, Entrepreneurship and SMEs
Unit H3: COSME Financial Instruments
Important problem for SMEs –
EU trends

percentage of respondents that considered those problems as most important for their enterprise in the past six months
Data from "Survey on the Access to Finance of Enterprises (SAFE)"
November 2018, http://ec.europa.eu/growth/safe
Bank loan – application & outcome EU

Data from "Survey on the Access to Finance of Enterprises (SAFE)"

November 2018, http://ec.europa.eu/growth/safe
Financial Instruments for SMEs

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 COSME Financial Instruments 2014-2020

Support those SMEs which would otherwise not obtain financing

 Loan Guarantee Facility (LGF): Focus on higher risk SMEs/riskier
transactions
 Equity Facility for Growth (EFG): Focus investments into risk capital
funds which target SMEs in their growth and expansion phase on a cross-
border basis and/or help SMEs to internationalise
How do EU financial instruments work
in practice
www.access2finance.eu
InvestEU

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•Thank you!

9
Access to Finance for MSMEs
and NIP Support

NIP Board Topical Discussion

13 December 2018
Short overview

 Over EUR 660m allocated in total to MSME funding (since

2008), with an increasing trend from 2014
 There has been an increasing demand for SME portfolio
Guarantees
 Average Global Leverage of 11, mobilising about EUR 5
billion in funding
200
176
180
160 Equity (funds); Technical
140 17% Assistance; 21%
122
120
100
100 77
70 Investment
80
Grant; 14%
60
31 32
40 23 Guarantees; 48%
17
20 10

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Lessons learned
 Diversity of instruments (ie: guarantees, investment
incentives, advisory support, microfinance, risk capital, equity,
structured funds, etc..), and partners has helped reach
different segments, address different needs.

 Close work with financial intermediaries is key, building

skills, track record, sustainable market practices etc… Access
to finance problems more acute outside of capitals, local reach
is fundamental.

 Advisory services strongly valued by SMEs: lack of

“bankable” projects. Scalability issues.

 Challenging to measures results, impact and data

aggregation.

 Big picture: www.EU4Business.eu, High Level Initiative all

together, etc…
Way forward
 Addressing the root causes (lacking business environment),
not the symptoms (scarcity of access to finance). Moving on
from putting only bandages.

 Pillar 3 of the External Investment Plan, regulatory work.

 Moving beyond banking sector, increasing options (i.e:

Structural Reform Facility).

 Focus on more specific niches with a demand approach, kick-

starting alternatives to develop entrepreneurial culture (start-
up, equity…). Guarantees channelled under EFSD+.

 Local currency, more sustainable and scalable solutions.

 Better impact measurement by DFIs: jobs, trade, growth.

Focus on specific target groups (women, youth).

 Joint messaging and coordination with other partners

(IFIs), coordination of diagnostic work, assessment, solutions.