EIF and Finland: our partnership
Over 20 years of collaboration has helped us to develop some of our most innovative and ground breaking initiatives in Finland. Ranging from pan-european programmes, down to more regional bespoke measures, we work towards finding efficient solutions to bring public and private funds together, for the ultimate benefit of the small business ecosystem.
Working hand in hand: the European Angels Fund
Business angels are a valuable source of capital and advice for entrepreneurs. The European Angels Fund (EAF) connects business angels with entrepreneurs and the venture capital community, and enables business angels to co-invest with the EIF in innovative SMEs.
The idea is to unite the business angel’s unique expertise with the EIF’s experience and network as one of Europe’s foremost venture capital investors. Each business angel is granted the maximum degree of freedom under the EAF, therefore supporting the individual’s investment style while still providing significant financial support.
The EAF, which is advised by the EIF, has already committed more than EUR 250m to over 100 carefully selected business angels across Europe, who have in turn built a portfolio of more than 630 SME co-investments.
In Finland, around EUR 30m has been committed by the EIF and its co-investment partner Tekes Venture Capital to five business angels, who have together invested in 18 SMEs.
Fostering inclusive financing: the Social Impact Accelerator
Through the Social Impact Accelerator (“SIA”) established in 2015, a pan- European social impact investing platform of EUR 243m, the EIF takes cornerstone equity investments in social funds, which, in turn, invest to build successful social enterprises. Under SIA, a social enterprise must deliver on social impact metrics as well as financial metrics. In Finland, the EIF invested EUR 17.5m via SIA in Vault Impact Fund I KY, a first time team which is forging new ground as the very first Finnish-based fully dedicated impact investment fund targeting ventures based in Finland, Sweden and Estonia.
In 2017, and under the first social impact bond scheme of its kind, the EIF invested EUR 10m from EFSI in Epiqus Kotouttaminen I Ky (also known as KOTO SIB), a payment-by-results scheme which focuses on the integration of migrants and refugees into Finland. The Finnish Ministry of Economic Affairs plays the role of Commissioner, and only remunerates the social interventions if the associated outcomes (i.e. employment objectives) are met.
The SME initiative
The SME Initiative (SMEi) combines European Structural Investment Funds (ESIF) with EIB, EU and EIF resources, allowing different levels of risk to be assumed across the capital structure and ultimately mobilising a much larger volume of loans to SMEs in Europe. This combination of funds promotes economies of scale and larger investments. Alongside ESIF, the SMEi is co-funded by the EU through COSME and/or Horizon 2020 resources as well as EIB Group resources.
In Finland, following an agreement between the European Commission, the Ministry of Economy and Employment of Finland and the EIB Group, the SMEi Finland was launched in 2016 in order to provide EUR 400m of new SME financing to the country. A mere two years later, over 90% of this commitment was fulfilled and deployed to Finnish SMEs via five local banks. Thanks to this success, the Ministry of Economy topped up the instrument with EUR 35m of its own funding; meaning that a total leveraged amount of EUR 750m will reach Finnish businesses via this initiative; an excellent and collaborative success story.
Mobilising innovation, employment and reaching out to high risk SMEs: InnovFin, EaSI and COSME
The EIF also deploys various central EU mandates that are crucial to delivering additional impact to the SME market, particularly in the areas of innovative, micro and high-risk SMEs. InnovFin is a joint EIB Group and EU initiative aimed specifically at fostering innovation across Europe and beyond, focussing on areas such as life sciences, clean energy and high-tech. In a parallel vein COSME, the EU’s growth and competitiveness programme, facilitates access to finance for SMEs, supports internationalisation and creates an environment favourable to competitiveness.
Finally the Employment and Social Innovation (EaSI) programme promotes quality and sustainable employment, improves working conditions and decent social protection, while combating social exclusion and poverty.