In addition, the EIB announced to ministers its intention to give a new 1 billion euro mandate to its European Investment Fund subsidiary to provide mezzanine finance to SMEs.
The increase in lending will accompany sweeping reforms to the EIB's SME loan product that should make loans both simpler and more attractive for companies and the EIB's partner banks. The first of the new "European Loan for SMEs" is due to be signed in the coming weeks.
"For us it is not just a question of doing more, but above all doing better," said EIB President Philippe Maystadt.
The reforms come in response to the results of a consultation of the SME lending sector carried out by the EIB in 2007/08 and in the context of the "Small Business Act" proposed by the European Commission in July 2008. The 23 million SMEs in the European Union represent 99 percent of all businesses and, according to the Commission, accounted for 80 percent of new jobs created in the EU in recent years, making them a key engine for growth.
The EIB aims to provide companies with the financing necessary for them to fully benefit from the simplification of small business regulations, thereby supporting activity and European competitiveness.
The changes will relax the definition of eligible investments, opening EIB finance to a wider spectrum of small and medium-sized companies, and lighten reporting rules on intermediary banks. By the end of the year, the EIB will also develop new products offering to share part of the risk that banks take on when lending to companies that are judged to represent a higher risk.
In future, small companies will be able to use EIB finance for investment in intangible assets, which is not the case until now. Investment in research and development, the acquisition of intellectual property rights, the expansion of distribution networks and also the transmission of companies due to generation or staff-related change will all be eligible for EIB loans.
The EIB has been providing small companies with loans through intermediary banks since 1968. In 2005 supporting SMEs became one of the EIB's operational priorities. The planned increase in lending should increase the number of small companies that benefit from EIB finance from 150,000 to around 200,000 a year.
The EIB is the long-term lending arm of the 27-member European Union. It raises money by issuing bonds on capital markets. In 2007 it lent nearly 48 billion euro to projects both inside and outside the EU. Finance ministers also make up the EIB's board of governors, its highest decision-making body.
