Speech by the President of the European Economic and Social Committee on cooperative banks and innovation in SME financing
Ladies and Gentlemen,
- It is a great pleasure for me to welcome you here today to the European Economic and Social Committee, on the occasion of the conference entitled: ‘Cooperative banks and innovation in SME financing’. This conference was organised by the European Economic and Social Committee, the International Confederation of Popular Banks (CIBP – Confédérationinternationale des banquespopulaires), the European Association of Cooperative Banks (EACB), UNICO Banking Group and the European Association of Craft, Small and Medium-Sized Enterprises (UEAPME).
- Today’s conference follows on from two previous events, organised by the same partners: an initial conference, which took place in March 2013, on the theme ‘Facing SMEs’ Financing Challenges in Turbulent Times’, and a second conference, which took place on 1 December 2014, on the theme ‘Cooperative banks: a model to finance the real economy’. These conferences provide a good illustration of the role of the EESC, namely its role as a bridge to or an open door on civil society.
- The conference today will help to bring into sharper focus the growing strength of technology operators in financial services. It will centre, above all, on SME financing and the interactions between these new players and cooperative and popular banks.
- As regards its format, the conference will include three roundtables giving stakeholders the opportunity to discuss their points of view on the following topics:
cooperation between marketplace lending platforms and cooperative/popular banks in SME financing: the hybrid lending opportunity;
innovative SME Financing with EFSI and other EU Financial instruments: experiences and way forward;
how is the regulatory framework affecting the role of cooperative banks in financing SMEs?
- In Europe, small and medium-sized companies (SMEs), which account for 99.8% of active companies, are the main source of economic growth and job creation. However, these companies often have difficulties finding the capital to finance their research, develop new products and break into new markets. Participatory financing platforms, which were the subject of an EESC opinion in 2014, represent an emerging and alternative source of financing. Through their proximity to local communities and their stable relationships with their members and customers, cooperative banks provide ongoing financing to the real economy and to SMEs in particular. In combination with the possibilities provided by participatory financing platforms, cooperative banks or popular banks are able to create new opportunities for SMEs.
- The European Fund for Strategic Investments (EFSI), which is part of the European Investment Plan, is a good source of financing for SMEs. It is designed to overcome the lack of investment within the EU by mobilising private financing for strategic investments. Thus two SME programmes have been bolstered by the EFSI:
the COSME loan guarantee facility, focused on supporting higher risk SMEs and higher risk SME transactions, and
theInnovFin SME guarantee facility, focused on the financing of innovative and R&D-driven companies.
The roundtable devoted to this topic will help to give us an overview of the experiences that we can already report on, and will show us the path to follow.
- With regard to regulations, it is important to make sure that they are not an obstacle to SME financing. Indeed, overly heavy regulatory frameworks risk causing an obstacle to SMEs’ access to loans. In this spirit, to avoid negatively affecting cooperative banks and the loans that they grant to the local economy and SMEs, applying the principle of proportionality would be shrewd. In this respect, as far back as 2008, the Commission declared in the ‘Small Business Act’ that it was important to take account of the characteristics of SMEs when drawing up legislation. Moreover, in its opinion on ’The role of cooperative and savings banks in territorial cohesion - proposals for an adapted financial regulation framework’ (rapporteur: TriasPintó), the EESC pointed out that ‘the main problem remains the insufficient application of the proportionality principle in the new banking rules (especially regarding the Capital Requirements Directive - CRD IV and the Capital Requirements Regulation - CRR)’. As Socrates said: ‘Everything in moderation’.
- Ladies and Gentlemen, I wish you an excellent day’s discussion on cooperative banks and financial technology, two components which, to achieve optimum results, must be seen not as two competitors but as two "coopetitors". It is in working in partnership with the EU institutions, Member States, stakeholders, the financial sector and cooperative banks that we will be best equipped to guarantee SME financing possibilities.
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EESC-2016-06020-00-00-DISC-TRA (FR) translated and revised externally 1/2