EXECUTIVE SUMMARY
KEY ACTIONS AGREED BY THE EXPERT GROUP:
shorted by importance and short term feasibility:
PUBLIC-PRIVATE SHARED INVESTMENT MODELS: Building on the success of initiatives like “France Relance,” this action advocates for collaborative investment strategies that engage both public and private sectors in financing bank-originated SME/Midcaps quasi-equity loans. Such partnerships are essential for creating a supportive ecosystem that promotes growth, ensuring these businesses can access the necessary capital while distributing risks effectively.
55% likely to be implemented in the short term according to the attendees.
STANDARDIZATION OF PUBLIC GUARANTEES: EIB to inspire a “common framework” for SME bank portfolio guarantees that National Public Institutions (NPI) could implement in a standardized way. By establishing common minimum data requirements and thorough asset assessments, this initiative will enhance investor confidence and streamline the funding process, making it easier for scale-ups and SMEs to secure the financing they need.
26% of chances to be implemented in the short term.
- Expand Alternative funding channel
DEVELOPING ACCEPTABLE BENCHMARKS TO FOSTER RETAILISATION: Establishing reliable and acepted benchmarks through the Euroepan Data Warehouse (EDW) SME loans is essential to broaden investors base into SME debt/equity loans ensuring compliance with national regulators “apropriate” definition according to PRIIPs requirements. It has been demonstrated that SME/Midcap private lending, as measured by the Spread Risk Indicator (SRI), exhibits limited volatility compared to private equity. However, the lack of appropriate benchmarks or proxies currently limits the expansion of this asset class into retail investment.
50% of the attendees think they can take action this year to solve this issue.
MARKET TRANSPARENCY THROUGH QUALITY MONITORING AND REPORTING: Implementing robust monitoring reporting frameworks will ensure investors have access to high-quality data, facilitating informed decisionmaking and fostering trust in SME/mid caps backed assets. It will bring to SME/midcaps private debt the best practice identified in the Collateralized Loan Obligation (CLO) markets where all the companies in the portfolio are rated by Credit Rating Agencies.
26% of attendees think they can take action this year to solve this issue.
=======================================
Inbonis is a member of the SME Finance Forum.
