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The securitisation instrument under the SME instrument in Italy

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The SME Initiative (SMEI), launched in Italy in October 2016, is co-financed by the Republic of Italy, the European Commission and the EIB Group with EIF managing the scheme on behalf of the different contributors.

SMEI is a public-private partnership acting as catalyst for private investments and supporting economic growth and job creation in southern Italy (the so called “Mezzogiorno”) which includes 8 Regions: Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily.

To this end, it entails an innovative use of European Structural and Investment Funds (ESIF) combining the latter with additional national resources, EU central budget (resources from the programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) and EIB Group funds.

Through the use of securitisation structures (both funded and synthetic unfunded), the EUR 202.5m of contribution of the Republic of Italy - of which EUR 102.5m of ESIF from the European Regional Development Fund (ERDF) and EUR 100m of national resources - leveraged with commercial lending, are expected to generate about 1.2bn of new SME loans at favorable terms in southern Italy.

Under SMEI Italy, EIF will enter into securitisation transactions of existing portfolios of debt finance to SMEs and Small Mid-Caps. The selected financial intermediaries shall in turn undertake to provide new lending to SMEs located in the Mezzogiorno area, multiplying both the contribution of the Republic of Italy and  of COSME allocated to the relevant underlying securitisation transaction.

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