Missing in action – The winners, the losers and the unknowns of the European Investment Bank’s anti-crisis SME offensive in central and eastern Europe

Study    |    8 December 2010

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As a response to the global financial crisis and at the urging of the EUs finance ministers, the European Investment Bank (EIB) in 2008 initiated a stimulus package which included the immediate deployment of an additional EUR 15 billion to its ‘global loan’ lending in order to help support the small- and medium-sized enterprise (SME) sector across the EU. Global loans are a form of funding which, unlike the EIBs standard project financing, is provided to third party intermediaries (predominantly commercial banks), who then lend out the funds along with their own contribution to borrowers.

This report focuses on the EIBs global loan funding and disbursements during 2008 and 2009 to four states within the CEE region: the Czech Republic, Hungary, Poland and the Slovak Republic. This two year period saw the most severe impacts of the financial crisis and the study therefore focuses on assessing the effectiveness of global loan lending in disbursing funds to SMEs in these four states as well as the effectiveness of global loans in providing support to the SME sector as was the intention.

In essence, the package that was designed to stimulate the SME sector of the economy appears to have provided greater stimulation to the intermediary banks who were the initial recipients of the funding. SMEs in the region have themselves reported difficulty accessing the EIBs additional funding, largely due to the tightened lending conditions and restrictions imposed by local banks.