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Annual Report 2011
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limited but nevertheless important segment of the Euro-
pean structured finance market (between 6% and 16%
of total yearly issuance during the decade). In 2011, the
share of SME securitisation was around 16%. In 2011,
in terms of volumes, European SME issuance was signifi-
cantly stronger than in 2010.
Following the year 2009 in which there was no public place-
ment of an SME transaction, in 2010 and 2011 the SME
securitisation market showed some signs of re-opening with
EIF playing a key role in some benchmark transactions.
Improved transparency is going to be important for the
further recovery of the market. In this context, the ECB
intends to progressively introduce requirements in its col -
lateral framework for ABS originators to provide loan-level
data on the assets underlying these instruments and to
distribute standardised securitisation information to market
participants. Moreover, there are market-driven initiatives
to introduce quality standards, such as the Prime Collater-
al Securities (PCS) initiative. This initiative aims at labelling
certain SME securitisations as a brand with key attributes
such as quality, simplicity, transparency and liquidity, in-
cluding commonly agreed standards and definitions.
Microfinance
One key objective of the Europe 2020 strategy is the more
efficient use of EU funds to support social inclusion and fight
poverty including a more efficient utilisation of micro-credits.
According to Eurostat data, the incidence of poverty and
social exclusion is greater in Eastern Europe, but also in those
Western and Southern European countries which are suffer-
ing most from the impact of the current sovereign debt crises.
Microfinance aims at supporting the development of self-
employment and micro-enterprises, the latter forming by
far the majority of all companies. In the EU, according
to Eurostat, 92% of all enterprises have fewer than ten
employees. However, recent ECB surveys and business
climate indicators revealed stronger difficulties in access-
ing finance and a less favourable business situation for
micro-enterprises than for other SMEs in 2011.
The providers of microfinance are challenged by adverse
macro-economic conditions. During the financial and eco-
nomic crisis, their clients showed higher bad debt rates, and
latest surveys reveal the lack of access to long-term funding
as the most pressing problem of microfinance providers.
Moreover, microfinance institutions are challenged by
structural issues. The European microfinance market is
still young and quite heterogeneous, due to the diver-
sity of legal frameworks, institutional environments and
microfinance providers in European countries. In 2011,
the European Commission published a European Code
of Good Conduct which contains recommendations and
standards for the provision of micro-credit in order to foster
best practice in the microfinance sector. EIF is support -
ing the development of microfinance into a fully-fledged
segment of the European financial sector by providing
funding, guarantees but also technical assistance through
JASMINE to a broad range of financial intermediaries.
SME securitisation volumes in Europe
Source: based on data from AFME and KfW
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
SME Sec (lhs)
Share of SME Sec in Total Sec (rhs)
80
70
60
50
40
30
20
10
0
18
16
14
12
10
8
6
4
2
0
I
I
I
I
I
I
I
I
I
I
Year
% of total securitisation
EUR bn