EIB and UBI Banca Group provide €350 million for SMEs, midcaps, start-ups and youth employment

The signing of a credit line fostering youth employment brings the number of medium to long-term lending agreements in support of Italian firms concluded by the European Investment Bank (EIB) and the UBI Banca Group in the past three months to three – for a total amount of €350 million.

These initiatives are being mounted in the framework of the long-standing partnership between the EIB and UBI and are designed to further strengthen support for Italy’s productive sector, soften the impact of the financial crisis and help to stimulate economic recovery.

Especially innovative is the €50m loan signed in Milan on 30 January aimed at fostering youth employment in small- and medium-sized businesses under the Jobs for Youth programme recently launched by the EIB at the request of the European Union to tackle the growing problem of unemployment – especially youth unemployment.

The UBI Group has undertaken to also provide its own funds to the beneficiary firms, thereby increasing the total amount of financing made available in support of Italy’s economy.

“With these operations we are further strengthening our partnership with UBI, a group that has demonstrated its sensitivity to the Italian economy’s needs through its commitment to supporting SMEs and midcaps and is quick to deploy new facilities such as loans under the Jobs for Youth programme, which is aimed at tackling the Europe-wide plague of youth unemployment,” said EIB Vice-President Dario Scannapieco.

“Creating jobs for young people is one of the country’s top priorities and it is right for us to contribute innovative solutions,” said UBI Banca’s CEO Victor Massiah. “This agreement with the EIB will enable us to deploy dedicated instruments supporting bold business ventures that can nurture the green shoots of economic recovery.”

Youth employment (€50m)

The €50m EIB credit line will be channelled by the UBI Group’s network banks to start-ups, SMEs (firms with up to 250 employees) and midcaps (firms with between 250 and 3,000 employees) that are creating new jobs for young people in the 15-29 age group. Firms meeting at least one of the following criteria will be eligible for loans:

• They have hired at least one worker (three in the case of midcaps) aged between 15 and 29 in the six months prior to the loan request or will do so in the following six months;
• they comply with the provisions of Law 99 of 2013 on the promotion of youth employment;
• they provide vocational training programmes or internships for young people;
• they work together with a school, technical college or university to employ young people (e.g. in summer internships), and;
• they have an ownership structure in which the majority of the capital (over 50%) is held by young people under 29 years of age.

Small- and medium-sized enterprises (€200m)

A loan of €200m has been provided to support Italian SMEs (firms with a consolidated workforce of up to 250), with the EIB funds being deployed on particularly favourable terms. The credit line will exclusively target SME investment in new projects or schemes already underway and will be made available to firms in all productive sectors.

The following investments and costs will eligible for financing:

• Acquisition, renewal and expansion of tangible assets (excluding land);
• medium and long-term working capital needs;
• investment in intangible assets, and;
• generational change of ownership or transfer to ensure the continuation of a company’s business.

Projects costing up to €25m will be eligible for financing with loans of up to €12.5m. Pure financial investment and real estate projects are excluded.

Midcaps (€100m)

A maximum of €100m will be made available to customer firms with between 250 and 3,000 employees in all productive sectors to finance similar needs to those described for SMEs.

The EIB funds will especially be used to finance small (costing up to €25m) and medium-scale (costing up to €50m) projects.

The European Investment Bank is the long-term lending institution of the European Union owned by its member states. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

UBI Banca is Italy’s third biggest banking group by market capitalisation. It has market share of over 5%, around 18 000 employees and more than 1 700 branches that ensure its presence in key sectors of the Italian economy. UBI Banca is a cooperative group listed on the Milan Stock Exchange and included in the FTSE/MIB index.

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