The EU will operate under the “Creative Europe” programme a Financial Guarantee Facility from 2016 onwards, allocating more than €120 million to share the risk on loans offered to small and mid-sized enterprises in the cultural sector by banks.
The fund is expected to yield more than €750 million in affordable loans, a European Commission announcement says, adding that the bulk of the programme`s resources will continue to be allocated for non-repayable grants.
According to the announcement, a new study published by the European Commission finds that a mismatch in supply and demand in the loans market means creative businesses are missing out on billions of euros in credit.
In the next seven years, the financing gap could reach up to €13.4 billion, the study warns.
As a result, a sector which is crucial to the European economy – producing faster than average growth and accounting for up to 4.4% of the Union`s GDP – will see its growth significantly hampered.
The study was commissioned to help shape the EU`s new strategies to support the cultural and creative sectors.
One such initiative is the Financial Guarantee Facility under the new Creative Europe programme.
The Commission will also support initiatives aimed at improving knowledge among lenders and borrowers, as well as support measures to improve entrepreneurial skills among creative professionals.
These measures will allow creative enterprises to tap into private funds more easily and contribute to the growth of their sector, the announcement concludes.
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