The initiative allows the EIF to provide guarantees and counter-guarantees, free of charge, to selected financial intermediaries in order to enable them to provide more debt finance to entrepreneurs in the cultural and creative arena. Guarantee institutions, commercial and promotional banks as well as other financial intermediaries benefiting from the €121 million guarantee will support more than ten thousand SMEs in a wide range of sectors, such as audiovisual (including film, television, animation, video games and multimedia), festivals, music, literature, architecture, archives, libraries and museums, artistic crafts, cultural heritage, design, performing arts, publishing, radio and visual arts.
The financial instrument, set-up under Creative Europe, which is the main EU programme dedicated to the cultural and creative sectors, will be managed by the EIF on behalf of the European Commission. European SMEs should benefit from it as early as of the end of this year.
Commissioner for the Digital Economy and Society, Günther H Oettinger, welcomed the initiative saying: “Creative minds and companies need to experiment and take risks to thrive, for our society and for our economy. We are helping them to get the bank loans they would normally not get”.
The Commission explains that the creative and cultural sectors represent more than seven million jobs in the EU and account for 4.2% of the EU’s GDP. Access to finance can be difficult for these sectors, primarily due to the intangible nature of their assets and collateral, the limited size of the market, demand uncertainty, and lack of financial intermediary expertise in addressing sector specificities.
The new Cultural and Creative Sectors Guarantee Facility includes capacity-building activities for financial intermediaries, giving them specific expertise on key elements of relevant sectors.
In the coming days, the EIF will publish a call for expression of interest to which eligible financial institutions will be able to apply. After a thorough selection process, the EIF will select financial intermediaries, which can then make the new finance available to SMEs in targeted sectors. Financial intermediaries will report thoroughly on the financial products they will propose to SMEs and on their take-up.
The initiative is part of the Commission’s efforts to support investment and make smarter use of new and existing financial resources, which is the aim of the “Investment Plan for Europe”. It also complements the work done under the Digital Single Market strategy to create the right environment for the cultural and creative sectors, and in particular smaller businesses, to thrive in the digital era. To read the Commission’s press release in full, click here.