The European Investment Fund and Komerční banka (KB), have signed a guarantee agreement for Czech businesses supported by the new Cultural and Creative Sectors Guarantee Facility under the EU's Creative Europe programme.
The guarantee agreement will allow KB to widen their support to Czech SMEs in the cultural and creative sectors perceived to be more risky, reaching out to currently underserved sub-sectors including audio-visual, digital games, design and start-ups active in the creative digital content industry, with €25 million of loans over three years.
In total, around 700 SMEs in the cultural and creative sectors are expected to obtain access to finance as a result of this new Guarantee Facility. This agreement was made possible with the support of the European Fund for Strategic Investments (EFSI), the central pillar of the Investment Plan for Europe, the Juncker Plan.
Andrus Ansip, Vice-President for the Digital Single Market, said: “Cultural and Creative Sectors are one the fastest growing sectors of the European economy, yet creative SMEs face difficulties in accessing finance. Through this agreement, Creative Europe programme will help cultural and creative Czech companies get easier access to loans. Greater access to finance will allow them to invest in scaling-up their activities and to undertake bigger projects in film, music, books, video games and many more creative sectors."
EIF Chief Executive, Pier Luigi Gilibert, said: “I am delighted that we are announcing the first transaction in the Czech Republic under the Cultural and Creative Sectors Guarantee Facility. Given Komerční banka's previous experience in this sector, as well as the positive cooperation under the existing guarantee agreements including EaSI microfinance, COSME and InnovFin, I am convinced that the bank will ensure that SMEs will benefit from this new transaction soon.”
General Director of Komerční banka, Jan Juchelka, said: “Komerční banka holds a strong position as regards the range of products supported by European Investment Bank Group. KB is also heavily involved in lending for cultural projects such as those in film making. I am therefore delighted that now, cooperating with the European Investment Fund, we can offer clients to support their projects by a total amount of CZK 650 million at the first stage of the programme.”
The creative and cultural sectors represent more than 7 million jobs in the EU and account for 4.2% of the EU's GDP (source). Access to finance can be difficult to obtain for companies active within these sectors, primarily due to the intangible nature of their assets and collateral, the limited size of the market, uncertainty about demand, and also 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 characteristics of these sectors (e.g. specific business models and credit risk assessment in the sectors). This kind of expertise would be provided by capacity building provider(s) selected by the EIF (e.g. consultancies specialised in the way the cultural and creative sectors work) following an open call for tenders. Such support will be free of charge for financial intermediaries.
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
About Komerční banka
Komerční banka is one of the best run universal banks in Central Europe. It provides comprehensive services to clients in the areas of retail, corporate and investment banking. The Komerční banka Group’s 8,492 employees serve 2.4 million clients, who can use an extensive network of 387 business points throughout the country. Komerční banka currently operates 764 ATMs and 1.4 million of its clients use one of direct banking channels. KB is a part of the Société Générale Group.
About the Cultural and Creative Sectors Guarantee Facility and Creative Europe
Set up under the cross-sectoral strand of the Creative Europe programme, the Cultural and Creative Sectors Guarantee Facility is the first EU investment instrument with such a wide scope in the culture and creative sectors. It pursues the same objective as the SME window of the European Fund for Strategic Investments (EFSI), which drives the Investment Plan for Europe: increasing lending to SMEs to enable them to scale up their activities.
Creative Europe is a 7-year programme (2014-2020) designed to support the creative and cultural sectors. It has a budget of €1.46 billion for the whole duration of the period. It is composed of the MEDIA sub-programme, helping the development and the distribution of European audiovisual works, the Culture sub-programme, which supports culture sector initiatives promoting for example cross-border cooperation or platforms for emerging artists, and the cross-sectoral strand. The objective of Creative Europe is to promote cultural diversity, encourage the circulation of European culture and creativity and strengthen the competitiveness of the cultural and creative sectors.
About the Juncker Plan
The Investment Plan for Europe, the Juncker Plan, is one of the European Commission's top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB group to invest in more, often riskier, projects. The EFSI is already showing concrete results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise more than €264 billion in investments and support around 589,000 SMEs across all 28 Member States. The latest figures on EFSI by sector and country can be found here.
In September 2016, President Juncker proposed to extend the EFSI by increasing its firepower and duration as well as reinforcing its strengths. The European Parliament and Member States adopted the "EFSI 2.0" Regulation in December 2017.