Two billion euros available for SME loans in new cabinet plan

Additional reporting by Demid Getik

Dutch pension funds, insurance companies and banks will invest an additional 2 billion euros to provide loans for Dutch small- and medium-sized enterprises (SME) in the next three years, the government announced Wednesday. For this purpose, the Netherlands Investment Institution (NLII) is establishing two investment funds Wednesday.

To facilitate investment into the SMEs, the NLII is setting up a Subordinated Loans Fund (ALF) and a Business Loans Fund (BLF). The ALF enables entrepreneurs with restricted equity to attract loans between 150,000 and 5 million euros. Through the BLF, banks can load 10 to 25 million to entrepreneurs even if the banks already own a large share in a company or an industry.

Institutional investors, including Aegon, Robeco and the pension funds PGB, Nationale-Nederlanden and Metaal en Techniek, are investing 800 million euros in those funds. Through cooperation with banks, 2 billion euros of additional liquidity is thus available for SMEs.

The Ministry of Economic Affairs supports this private initiative and will make guarantees available as part of the cabinet’s action plan SME financing. “With the establishment of the first two funds, the NLII is taking an important step to strengthen the Dutch economy structurally. Entrepreneurs can hereby attract the necessary funds to invest into new products and services,” said Minister Henk Kamp. “That leads to jobs and economic growth.”
Without the funds of the NLII, it is less attractive for institutional investors to invest into the SMEs. The NLII creates a bridge between the players who invest on a large scale and the borrowing needs of the entrepreneurs.

The Ministry of Foreign Affairs’ guarantee for the ALF is part of the complementary action plan for the SME financing.