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9/26/15

Netherlands launches billion-euro small business fund - by Janene Van Jaarsveldt

Small and medium sized enterprises in the Netherlands now have a new opportunity to get a loan – the Netherlands Investment Institution has opened its Commercial Loan Fund, which has about 1 billion euros available to issue loans to SMEs.

Half of that money comes from six institutional investors – Aegon, ASR, Pension Fund Metal & Engineering, Pension Fund PGB, NN and the European Investment Fund, NOS reports. These investors contributed a total o 480 million euros. Banks contributed the other half. The Fund was established last year with the help of the Ministry of Economic Affairs. It aims to encourage investment in SMEs by bringing supply and demand of loans together.

According to the Netherlands Investment Institution, NLII, up until now there were a number of barriers standing in the way of SMEs getting loans. For example, the loans the companies need are too small to be of interest to institutional investors. Or banks being unable to approve a loan because they have too much money outstanding with a company or sector.

The NLII wants to resolve these problems by bundling the loans together, making it more attractive to institutional investors, and making half of the money come from the fund and half from the banks, giving banks more room to lend money. The fund gives loans of between 5 million and 25 million euros, with banks contributing an equal amount. The investors investing in the Fund receive a market interest rate on their investment.

“We are enabling entrepreneurs to make use of a new and additional funding channel worth about 1 billion euros. At the same time, institutional investors re getting a new opportunity to invest directly in the Dutch economy through the Commercial Loan Fund”, according to NLII director Loek Sibbing.

Read more: Netherlands launches billion-euro small business fund - NL Times

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