This report examines whether EU loan guarantees have supported smaller businesses’ growth and innovation by enabling them to access finance. We found that the Loan Guarantee Facility has helped beneficiary companies grow more in terms of total assets, sales, wage bills and productivity. However, the InnovFin SME Guarantee Facility lacked focus on companies carrying out innovation activities with a high potential for excellence. In addition, for both many businesses were not actually in need of a guarantee. Although evaluation activities have improved, several weaknesses remain.
We make a number of recommendations to the European Commission to improve targeting the guarantees on viable businesses lacking access to finance and on more innovative businesses. We also emphasise the importance of cost-effectiveness, since similar instruments already exist in the Member States.
Special report No 20/2017: EU-funded loan guarantee instruments: positive results but better targeting of beneficiaries and coordination with national schemes needed