Small and medium-sized businesses who qualify for a loan will be able to take advantage of financing at lower interest rates, with reduced collateral requirements.
Dutch sustainable lender Triodos Bank and the European Investment Fund (EIF) have signed three new guarantees that will allow new lending of over €200m to 600 small and medium-sized businesses (SMEs), to be divided evenly between the Netherlands, Belgium, Spain and Germany.
This fourth collaboration between Triodos Bank and the EIF is specifically aimed at boosting social entrepreneurship, sustainability, and the cultural and creative sectors. The cooperation between the two parties is once again supported by the InvestEU programme of the European Commission, which leverages substantial private and public funds in support of a sustainable economy in the EU. The €200m agreement takes the total lending by Triodos and the EIF to European SMEs since 2018 to €600m.
“The EIF supports businesses across the EU in a multitude of sectors, aiming to make finance more accessible. In the cultural and creative sectors, financing is notoriously difficult. That’s why, in collaboration with the European Commission, we created a specific budget line to support these sectors within the InvestEU programme,” EIF CEO Marjut Falkstedt told Impact Investor.
The EIF, which is part of the European Investment Bank, designs and develops venture and growth capital, guarantees and microfinance instruments to help European SMEs get access to funding.
Independent films
“The past agreements with the EIF have already shown that public and private partnerships can fuel the much needed transitions towards a better and more sustainable world. I am confident that this new agreement will have the same positive impact,” said Jacco Minnaar, chief commercial officer at Triodos Bank.
Founded in 1980, Triodos Bank has €24.1bn in total assets under management. It has banking activities in the Netherlands, Belgium, the UK, Spain, and Germany and investment management activities globally.
The Dutch lender has played a key role in supporting the creative and cultural sectors in Europe, as well as social entrepreneurship, according to Falkstedt.
Past SME projects funded by Triodos and the EIF include support for the independent film industry in Spain, Belgium and Germany, which has led to movies being made about labour rights and democratic values such as freedom and equality. A Triodos Bank loan, backed by an EIF guarantee, funded the redevelopment of Amare, a cultural hub in The Hague.
Social entrepreneurs that were supported by both parties include the electric aircraft flight school E-Flight Academy in the Netherlands, Belgian bicycle leasing company Cyclobility and Spanish sustainable fashion company Ecoalf.
The cultural and creative sectors not only play a huge role in the cultural backdrop of our societies, they also employ around 8 million people across Europe, according to Falkstedt.
“Critically, however, businesses in these sectors struggle to access finance, and that’s where we come in, to create financing opportunities in collaboration with partners like Triodos,” Falkstedt said.
Market uptake
A top up to an existing capped €67m guarantee from the EIF, signed in 2023, will enable Triodos Bank to make an extra €89m in new lending available for social entrepreneurship, both parties said.
A new uncapped guarantee will be split, in order to boost lending to SMEs that are making their businesses more sustainable, and the cultural and creative sectors. The sustainability part is expected to make up to €71m available for green investments by SMEs, and marks the first time the EIF has supported Triodos Bank on this investment theme. The other part of the guarantee will go to the cultural and creative sectors, where Triodos Bank and the EIF are aiming to generate €43m in new lending.
“Market uptake and demand have been very strong, so we expanded to include equity investments alongside the loan portfolio guarantees that we offer. We are seeing that this intervention is very useful and very much appreciated by the sector,” Falkstedt said.
A Triodos spokesman told Impact Investor that the new guarantees neatly align with the lender’s aim to support the transition to a sustainable economy in the energy, food, resources, societal and wellbeing sectors.
“We only finance entrepreneurs and enterprises that create positive change, so this partnership fits perfectly into this strategy. It also demonstrates our extensive track record in connecting sustainable entrepreneurs and projects to much needed financing,” he said.
