MICROCAPITAL BRIEF: EIB Pledges Venture Capital to Microfinance Institutions, Microfinance Investment Vehicles Operating in the Southern Mediterranean

The European Investment Bank (EIB), the long-term lending institution of the European Union (EU), recently pledged to create a venture capital scheme to support microfinance institutions and microfinance investment vehicles operating in the Middle East and North Africa within the next four months. The first beneficiary will be an unnamed Egyptian fund that finances domestic small and medium-sized enterprises (SMEs).

The aim of the project is to engage with other government and private institutions to fund private equity funds, venture capital funds, microfinance institutions and microfinance investment vehicles to enable these institutions to work with SMEs, with a priority on those expected to create the most jobs, especially for young people.

Christian Lopez-Baillo, an investment officer at EIB, stated “the Southern Mediterranean banks, finance institutions and large companies do not risk their money on projects carried by SMEs. By becoming a shareholder in these small companies, via investment funds, we allow them to grow and to access private funding and at the same time provide reassurance for the investors”. The countries that are involved in the scheme are Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine and Tunisia.

For the year ended December 2015, EIB reported total assets of EUR 571 billion (USD 637 billion) and a loan portfolio of EUR 504 million (USD 562 million).

By Imke Herholdt, Research Associate

About European Investment Bank (EIB)
The European Investment Bank (EIB) was created in 1958 and serves as the long-term lending bank of the European Union (EU). In addition to supporting projects in EU member states, its main priorities include financing investments in likely future member states and EU partner countries, principally in the area of small and medium-sized enterprises. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.” For the year ended December 2015, EIB reported total assets of EUR 571 billion (USD 637 billion) and a loan portfolio of EUR 504 million (USD 562 million).

Sources and Additional Resources
[1] Econostrum Info: EIB supporting venture capital to boost private-sector jobs in Southern Mediterranean
[2] MicroCapital Universe Profile: European Investment Bank (EIB)
[3] European Investment Bank

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