Credit to SMEs: a New Fund to Release 150bn of Credit for Businesses

Loan to SMEs

Credit to SMEs: a new fund to release 150bn of credit for businesses


The Guarantee Fund 662 is achieving the desired success and slowly Italian companies are understanding it: having the State as guarantor can facilitate or improve the conditions of access to credit.

Along the lines of the 662 Fund, the proposal of the Action Institute, an independent and apolitical think-tank on the economic-financial world, is about to arrive in the Finance Committee in the Chamber. The proposal is very interesting for companies: to reuse unused European structural funds to create an ” SME Fund ” which on the one hand reduces the risk for banks, on the other reduces the cost of credit for companies. All happy, in short.

The “Busicreditor” reports some details of how this Fund works:

By borrowing the success of the Central Guarantee Fund, this fund will guarantee credit portfolios to SMEs (only companies with adequate creditworthiness) upstream. To obtain the guarantee, the bank will pay a commission commensurate with the “expected loss in the event of a crisis” (first loss): the coverage of the fund will therefore be on the unexpected loss (“second loss”). This structure will allow banks to provide new credit with a reduced capital absorption: in return, banks will have to apply capped rates to transfer the cost and capital benefits to companies. The guarantee must be such as to facilitate the refinancing of the credit portfolios by the ECB through the securitization of the loans themselves or the use of credits (Pmi loans guaranteed by the fund) as collateral – without penalizing haircut – for refinancing with the Eurosystem…

It is still a proposal that must come to the Chamber to be discussed. But we believe it is good news, which helps to inform the public about the need for companies to obtain credit: this is the real cornerstone from which the economic recovery of our country passes.