Creative Europe Guarantee Facility: the selection of financial intermediaries begins
by Thierry Leclercq
- The European Investment Fund has launched the procedure for selecting financial intermediaries that may benefit from the guarantee mechanism for cultural and creative sectors
With a mandate from the European Commission to manage the new guarantee mechanism for loans issued to cultural and creative companies, this week the European Investment Fund (EIF) published a call for expressions of interest from financial intermediaries.
Officially launched on 30 June 2016 (see press release), this new financial tool, which was created within the framework of the Creative Europe programme, comes with a budget of €121 million with which to secure up to €600 million of loans issued to cultural and creative companies between now and 2020. These loans must be issued by the financial institutions chosen by the EIF at the end of a procedure that begins this week.
The financial intermediaries targeted are banks, credit institutions (public and private), leasing companies, funds or guarantee institutions and mechanisms established within the EU, in Iceland or in Norway. They have until 30 September 2020 to submit their expression of interest and will be selected as part of an ongoing process, most notably on the basis of their risk management policy, loans issued to SMEs, and their ability to manage the portfolios of loans issued to companies in the cultural and creative sector.
The EIF will then negotiate a guarantee agreement with the financial intermediaries that are chosen. “These intermediaries will have to produce detailed reports on the financial products they intend to offer and their adoption by potential beneficiaries”.
The EIF guarantee fund will offer these financial institutions partial coverage of the risk involved in issuing loans to SMEs operating in the cultural and creative sectors (audiovisual, film, video games, festivals, music, literature, cultural heritage, the performing arts, visual arts, etc). Capped at 70% of the investment, the guarantee fund can be used free-of-charge by the financial intermediary, which must nonetheless provide at least 20% of the amounts committed.
The financial intermediaries that are chosen will also have access to free-of-charge expertise on crucial issues associated with loans to the cultural sector: evaluating business models and credit risk, the use of intangible assets (intellectual property rights), etc. These capacity-building services will be provided in the form of training, meetings and workshops laid on by consultancy companies that will also be selected through a call for tenders.
(Translated from French)