Juncker Plan: Banque Populaire and Fédération Nationale des Socama sign EUR 2bn agreement with the European Investment Fund (EIF) to finance more than 65 000 French micro-enterprises

April 8, 2019

Banque Populaire, Fédération Nationale des Socama and the European Investment Fund (EIF) today signed a new 3-year loan counter-guarantee agreement worth EUR 2bn under the Investment Plan for Europe, or Juncker Plan, and COSME, the European Commission's programme for the competitiveness of small and medium-sized enterprises (SMEs). This new agreement will benefit more than 65 000 French micro-enterprises.

Through this agreement, Banque Populaire will continue to deploy its “Socama European Express Loan Without Personal Guarantee”, “Socama Creation Loan” and “Socama Business Transfer and Takeover Loan” products. The EIF’s counter-guarantee programmes have already enabled Banque Populaire and the network of small-business mutual guarantee companies (or ‘Socama’) to finance 200 000 French micro-enterprises to the tune of EUR 6bn.

Thanks to the various agreements signed with the EIF since 2003, the Banques Populaires have developed three particularly innovative financing solutions with the Socama companies:

  • the Socama European Express Loan Without Personal Guarantee – this loan of up to EUR 50 000 is for financing current and future development projects. No personal guarantee is required. It also includes a component dedicated to digital transformation, so enabling professionals to fund up to EUR 30 000 of tangible or intangible expenditure related to the digital transition of their business, e.g. advisory services, development of internet-based activity, equipment for digitisation of their point of sale.
     
  • the Socama Creation Loan – aimed at all companies less than two years old. This 18-60 month loan of up to EUR 30 000 serves to finance all expenditure related to enterprise creation, excluding takeovers: tangible and intangible investments, working capital requirements. This loan helps to contain company heads’ commitments as the manager’s personal guarantee is limited to 50% of the loan amount.
     
  • the Socama Business Transfer and Takeover Loan – this loan of up to EUR 150 000 is for financing takeovers. Personal guarantees are limited to 25% of the initial loan amount.

Christine Fabresse, Director General of BPCE Group’s Retail Banking and Insurance division, Daniel Goupillat, Chairman of the Fédération Nationale des Socama, and Alessandro Tappi, EIF Director of Investments and Guarantees, signed this loan counter-guarantee agreement under the COSME/EFSI programme.

European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici commented: “This agreement represents a wonderful financial boost for our small businesses, which all too often struggle to obtain the funds they need to grow. Thanks to the Juncker Plan – thanks to the EU! – they now have the means to create jobs, add value and go global.”

“We are very pleased to continue our loan counter-guarantee agreements with Banque Populaire and the Socama network”, remarked Alessandro Tappi, EIF Director of Investments and Guarantees. “This counter-guarantee facility enables SMEs and micro-enterprises to keep investing and developing. It is the mission of the EIF, and of the EU in general, to help businesses develop in the regions.”

Christine Fabresse, Director General of BPCE Group’s Retail Banking and Insurance division, said: “On the strength of our long-term partnership with the EIF and thanks to this new agreement, Banque Populaire is confirming its wish to improve access to credit for our professional customers. The EIF guarantee will enable the regional Banques Populaires to provide innovative Socama loans to support the creation/takeover or development of micro-enterprises and facilitate the digital transformation of their business.”

The Banques Populaires network consists of 12 regional Banques Populaires, Crédit Coopératif and CASDEN Banque Populaire. These independent banks provide a complete range of commercial banking and insurance services in a close relationship with their customers. Banque Populaire has 9.3 million customers (including 4.4 million members) and forms part of the second-largest banking group in France.

To better meet the needs of micro-enterprises, the Banques Populaires use the EIF’s partner network of 16 small-business mutual guarantee companies (Socama); in this way businesses can obtain loans without having to provide a personal guarantee or simply by providing a limited personal guarantee. Each year, the Socama companies guarantee between 25 000 and 30 000 loans for a total of EUR 800-900m and manage aggregate exposure of more than EUR 2bn.

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 by helping them to access finance. It designs and deploys venture and growth capital, guarantees and microfinance instruments specifically targeting this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

The Investment Plan for Europe, known as the Juncker Plan, focuses on boosting investment across the EU to generate 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 Investment Plan is already yielding results. The projects and finance contracts approved so far under the European Fund for Strategic Investments (EFSI), which is at the heart of the Juncker Plan, are expected to unlock investment totalling EUR 390bn in the 28 Member States and support some 929 000 SMEs. France has been the number one beneficiary of investment under the Juncker Plan in absolute terms, with EUR 64.3bn mobilised.

COSME is the European Commission's programme for the competitiveness of small and medium-sized enterprises (SMEs). For the period 2014-2020, it has a total budget of EUR 2.3bn. At least 60% of this amount will serve to facilitate access to financing for SMEs in Europe, thanks to two financial instruments. The COSME programme's Loan Guarantee Facility supports guarantees and counter-guarantees granted to financial institutions to enable them to provide more loans and lease financing to SMEs. This facility is also concerned with securitisation of SME debt finance portfolios. The COSME programme also invests, via the Equity Facility for Growth, in private equity funds that provide venture capital to SMEs, chiefly during the expansion and growth stages. The COSME programme is building on the success of the Competitiveness and Innovation Framework Programme (CIP) (2007-2013), which helped to mobilise over EUR 21bn in loans and EUR 3bn in venture capital in support of more than 400 000 SMEs in Europe. Businesses may approach selected financial institutions in their country to access EU financing: http://www.access2finance.eu/