EIF and Bank Leumi sign deal to finance innovative companies

The European Investment Fund (EIF) and Bank Leumi, along with LeumiTech, the high-tech banking arm of Leumi, have signed an agreement to increase lending to innovative small and medium-sized enterprises (SMEs) as well as small mid-caps in Israel under InnovFin – EU finance for innovators, an initiative supported by the European Commission.

The new agreement allows Bank Leumi to provide finance amounting to  USD 100 million (EUR 93 million) to innovative companies in Israel  with the support of a guarantee provided by the EIF and backed under Horizon 2020, the EU Framework Programme for Research and Innovation. This is the first InnovFin SME guarantee signature in Israel, enabling Leumi, Israel’s leading innovative finance provider, to offer innovative companies additional financing at favourable conditions.

EIF Chief Executive, Pier Luigi Gilibert said: “I am pleased to be signing the first InnovFin SME Guarantee agreement with Bank Leumi for the benefit of innovative companies. Bank Leumi is a key player in the innovation arena and we are strongly convinced that together we can provide support to innovative and growing businesses in need of finance”.

Carlos Moedas, European Commissioner for Research, Science and Innovation, said: "The InnovFin SME Guarantee deal signed today will open up new ways of funding for innovative companies in Israel. It is yet another example of how open innovation and being open to the world under Horizon 2020 benefits both the EU and its partners."

CEO of Bank Leumi, Rakefet Russak-Aminoach, believes that joining the program will increase Leumi funding of the Israeli high-tech sector. Taking part in the European bank's flagship program for research and innovation, is another step forward in our efforts to expand the Israeli funding of the industry. It will allow better financing terms for the Israeli high-tech community. It is only natural that the leading bank that is the  most supportive of the Israeli high-tech industry, is also the first bank to take part in this unique program." Russak-Aminoach also added that she sees Leumi's participation in the program as an opportunity for future collaboration in EIF programs.

Yifat Oron, Leumitech CEO: "It's common knowledge that Israel is THE 'Start-Up Nation' and spearheads innovation. The agreement signed today will enable LeumiTech to expand even further its support to the high-tech industry and to offer companies additional products specifically tailored to the industry's unique character. I am positive that every high-tech firm could gain great additional value receiving funding via the program, on top of the usage of LeumiTech's wide range of existing financial products."

The aim of the InnovFin SME Guarantee is to encourage banks or other financial institutions to lend to SMEs and small mid-caps (firms with fewer than 500 employees) in need of investment and/or operating capital to finance research, development and innovation activities, with EU financial support. Financial institutions are being selected by the EIF following a call for expression of interest for financial intermediaries across Europe.

About InnovFin SME Guarantee

InnovFin SME Guarantee provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million, in order to improve access to debt finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The InnovFin SME Guarantee is implemented by the European Investment Fund, and will be rolled out through financial intermediaries (banks and other financial institutions) in EU Member States and Associated Countries. Under the InnovFin SME Guarantee, financial intermediaries will be guaranteed by the EIF against a proportion of their losses incurred on the debt financing. InnovFin SME Guarantee is part of InnovFin - EU Finance for Innovators, a new range of EIB Group (including EIF and EIB) products to facilitate access to finance for innovative businesses. This transaction is supported with the financial backing of the European Union under Horizon 2020 Financial Instruments.

About EIF

The European Investment Fund's (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

About Bank Leumi

Leumi is Israel’s oldest banking corporation and one of the leading and largest corporations in the Middle East. At the end of 2014 total assets under management of the Group reached NIS 1,222 billion (USD 314 billion) and the Group’s total assets amounted to NIS 396 billion (USD 102 billion).

With a local market share of approximately 30%, the Leumi Group today operates more than 250 branches throughout Israel, in addition to branches and offices located in key financial centres across the globe. Leumi provides a wide spectrum of high quality banking services to all customer segments, starting with households, through small and middle-market businesses, and up to large corporations.

LeumiTech, the high-tech banking arm of the Group, was formed in 2014 with the main goal of promoting financing and development in the Israeli high-tech industry. Within a short period of time LeumiTech has established itself as the financial home for Israeli high-tech, by providing companies with a comprehensive package of services including: credit and financing, investments and partnerships, unique products and services tailored to the industry, and an innovative global platform for managing their international financial operations. Out of hundreds of start-ups established in Israel in 2015, over 60% chose to work with LeumiTech.

About Horizon 2020

On 1 January 2014, the European Union launched a new research and innovation funding programme called Horizon 2020. Over the next seven years almost EUR 80 bn will be invested in research and innovation projects to support Europe’s economic competitiveness and extend the frontiers of human knowledge. The EU research budget is focused mainly on improving everyday life in areas like health, the environment, transport, food and energy. Research partnerships with the pharmaceutical, aerospace, car and electronics industries also encourage private-sector investment in support of future growth and high-skilled job creation. "InnovFin – EU Finance for Innovators", the new generation of EU financial instruments and advisory services was developed under Horizon 2020 to help innovative firms access finance more easily. "InnovFin – EU Finance for Innovators" will help to inject up to EUR 48 bn in investments in Research and Innovation across Europe.

Press contacts:

EIF: David Yormesor
Tel.: +352 42 66 88 346, e-mail: d.yormesor@eif.org

Bank Leumi: Aviram Cohen
Tel.: +972-54-562-9500, e-mail: aviram@pr360.co.il