EU/EBRD Extension 6 - SME Finance Facility FRW

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The proposed project is an increase of up to EUR 200 million of the existing Facility (totalling EUR 1,000 million). It consists of a framework operation in favour of financial intermediaries incorporated in the EU Accession countries (Bulgaria, Romania, Croatia) and in the New Member states (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic, Slovenia). The Facility provides medium and long-term funds to banks and leasing companies with the aim to facilitate access to finance for the small and medium-sized enterprises (SMEs) in the above eligible countries. The Facility provides a Performance Fee to compensate participating financial intermediaries for the extra administrative costs to finance SMEs and for the risks of entering a new market segment. Technical assistance Is also provided to enhance risk management, streamlining operations and for product development related to SME financing. To date, the European Commission (EC) has contributed EUR 138.75 million to support the institutional building element of the Facility. Transition impact of the Facility stems from two separate sources. First, the Facility targets the outreach of local banks and leasing companies to new micro and small enterprises, therefore its first source of transition impact is in the support to entrepreneurship. Second, the Facility targets the creation or improvement of sustainable sources of finance for micro and SMEs, therefore its second source of transition impact is in the demonstration of new ways to finance business. Financing will be channelled through participating banks and leasing companies in the eligible countries that can demonstrate a satisfactory financial viability, a capable management team and commitment to small and medium-sized enterprises in their lending/leasing policy. EUR 200 million. EUR 200 million. The financial intermediaries funded by EBRD under the Facility must apply EBRD’s Environmental Procedures for Small and Micro Loans and Environmental Procedures for Leasing Companies respectively to all sub-loans and leases supported through the Facility. The procedures to be adopted will also include the Bank’s Environmental Exclusion and Referral List. In implementing these procedures, the financial intermediaries will assess potential environmental issues associated with SMEs, which are required to comply, at a minimum, with local/national health, safety and environmental requirements. Up to EUR 9 million, to be funded by the EC under the 2005 contribution. The technical cooperation funds will be used to contribute to institution building through enhancement and streamlining of SME lending/leasing procedures, training of staff, strengthening of Management Information Systems and marketing strategy, aiming to enable the participating institutions to build long-term capacity to provide financing to SMEs on a sustainable basis.