Within its framework, the European Investment Fund (EIF) has been allocated €1.1bn to be split between venture capital – with the High Growth and Innovative SME Facility (GIF) – and guarantees – with the SME Guarantee Facility (SMEG).
The European Investment Fund (EIF) and the Turkish guarantee institution Kredi Garanti Fonu (KGF) have signed a €45m agreement to provide enhanced access to finance for businesses across the country.
This deal is expected to target start ups and young businesses, which could now have access to over €100m of loans guaranteed under the SME Guarantee Facility (SMEG) of the EU Competitiveness and Innovation Framework (CIP) Programme.
The CIP, which spans from 2007 to 2013, has been put in place to boost European productivity, innovation capacity and sustainable growth, whilst simultaneously addressing complementary environmental concerns.
In particular, the SMEG offers a tool to allocate additional financing volumes for those SMEs that would not otherwise have access to resources and financial engineering instruments because of the increased lending risk entailed.
Guarantees will cover investment and working capital loans provided by different financial intermediaries. Loan projects supported by KGF under the CIP programme in Turkey will be expected among other objectives to improve local village environments, protect the architectural heritage and support tourism.
In addition, the agreement has allowed KGF to launch the new initiative “One SME for every village”, which aims at working with at least one business in each of the 3,000 villages targeted across Turkey, including those where access to finance is more challenging.