illimity and the EIB Group come together to support Italian companies

By Joy Dumasia

The EIB Group comprises the European Investment Bank (EIB), European Investment Fund (EIF), and illimity Bank S.p.A have signed two agreements to provide new liquidity to Italian small and medium-sized enterprises (SMEs) to help them meet the challenge of the post-COVID-19 recovery. The agreements aim to unlock over €1.2 billion financing under two EIB Group guarantees totalling €210 million. This financing has been supported by the contribution of the European Guarantee Fund (EGF), part of the European Union’s €540 billion packages of measures to address the economic difficulties and production slowdowns caused by the coronavirus pandemic.

illimity will provide suppliers with early payments in line with their financial needs, thus reducing the risk of interrupting their supply chains and improving their working capital position. The European Guarantee Fund will allow illimity to further invest in the financial instruments available to Italian supply chains, increasing both the loan amounts and the number of companies involved. The EIB Group guarantee will cover up to 75% of illimity’s exposure to buyers for three years.

The European Investment Fund (EIF) will provide a €150 million guarantee to illimity, enabling it to originate a €215 million financing portfolio for small and medium-sized enterprises. Access to credit will be supported on favourable terms for Italian SMEs exposed to the pandemic crisis, thus safeguarding employment levels. The EIF guarantee under the EGF will cover up to 70% of illimity’s exposure to these new loans to SMEs.

Corrado Passera, CEO and Founder of illimity, said: “illimity was created to enhance and support the potential of SMEs, and we are therefore delighted with the agreement signed with the EIB, which will enable us to go even further help businesses, especially for supply chain financing. In these unprecedented times, finance has a great responsibility to the business world, and illimity intends to make its contribution using all the tools at its disposal.”

Gelsomina Vigliotti, Vice-President of EIB, commented: “The EIB together with illimity continues to support the economic recovery of Italian companies hit hard by the economic crisis caused by the pandemic. The Association for Financial Markets in Europe estimates that SMEs have lost between €450 billion and €600 billion due to the pandemic. Via the European Guarantee Fund (EGF), which was specifically created to address the consequences of the crisis, the EIB is providing businesses (particularly SMEs) with the liquidity they need to ensure business continuity while paying employee salaries and supplier bills. Italy is among the main beneficiaries of EGF funds to date.”