European Investment Fund

COSME - Competitiveness of Enterprises and Small and Medium-sized Enterprises

 

COSME aims to make it easier for small and medium-sized enterprises (SMEs) to access finance in all phases of their lifecycle – creation, expansion, or business transfer. COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises running from 2014 - 2020 with a planned budget of EUR 2.3 billion.

The COSME equity financial instrument builds on the experience of the equity financial instrument under the Competitiveness and Innovation Framework Programme (CIP) that ran from 2007 to 2013. From 2007 to date, the equity financing facility under CIP (the so-called GIF facility) has mobilised more than EUR 2.3 billion in equity investments.

 

Competitiveness and Innovation Framework Program (CIP) of European Union

With the framework of the “Competitiveness and Innovation Framework Program of European Union” signed by and between KGF and EIF on January 27, 2010, the project named “One SME in Each Village” was commenced. The purpose of the project is to develop SMEs, support new investments and to increase entrepreneurship and employment in rural areas.

For the credits requested from banks associated in KGF by SMEs, based on the counter-guarantee provided from KGF in scope of the Project, the guarantee facility was made available with 50% co-guarantee between KGF and EIF, and having attained the targeted credit capacity amounting to EURO 112.5 million, the Project was successfully completed on January 26, 2013.

  • Project size  : € 112.5 million

  • EIF counter-guarantee amount  : € 2,925,000

  • Counter-guarantee maturity : 8 years

  • Project sources : 50% EIF counter-guarantee, 50% KGF guarantee

  • Project risk sharing  : 40% EIF, 40% KGF, and 20% Bank

  • Targeted guarantee capacity : € 90 million

  • Realized guarantee capacity : € 88,646,830

  • Realization ratio  : 98%

  • Number of guarantee transactions : 689

The total credit limits are TRY 1,250,000 per SME and TRY 625,000 per transaction.

The maturity is minimum 12 months and maximum 8 years. Guarantee commission rate is 0.5% per year.

IPA Greater Anatolia Guarantee Facility (GAGF)

Under the financial collaboration between the European Union (EU) and Turkey, counterguarantees have been supplied in the amount of 4.5m EUR for guarantees to SMEs located in less developed 43 cities in Turkey who obtain a fewer share in SME loans and fall under the 75 % threshold of the per capita income.

In respect to this counterguarantee and with the commencement of the Project in 2011, the Portfolio Guarantee System (PGS) has become operational in 2014, PGS protocols have been signed with 9 banks and the Project has quickly reached its target within 9 months.

After the successful implementation of the PGS, it has been decided to extend the program in 2015 and the counterguarantee support amount has been increased by another 9m EUR.

The second phase which began in September 2015 is planned to be completed by 2017 year end.

  • Project size  : € 112,5 million (Phase I + Phase II)

  • EIF counterguarantee amount : € 13,5 million

  • Project sources : 75% EIF counter-guarantee, 25% KGF equity

  • Project risk sharing : 60% EIF, 20% KGF, and 20% Bank

  • Targeted guarantee capacity : € 90 million (Phase I + Phase II)

  • Realized guarantee capacity   : € 72.459.352,50 million (as of March ’18)

  • Realization ratio  : 80%

  • Number of guarantee transactions  : 5.711

Guarantee commission rate is 0.5%. The maturity is minimum 6 months and maximum 36 months. The limit per SME is TRY 70,000.