German government-owned bank KfW and EIF provide SMEs in German with an additional $546m in funding over the next two years.

European Investment Fund (EIF) and German government-owned bank KfW have signed an agreement to provide an additional €500m ($546m) to small and medium-sized business (SMEs) over the next two years.

The additional funding will be made available to SMEs and small mid-caps that already benefit from the support of the European Fund for Strategic Investments (EFSI). EFSI is part of the Investment Plan for Europe and, to date, has leveraged approximately €50bn of investment in Europe.

Funding will be provided by KfW through on-lending banks and will be focused on supporting innovative companies in Germany.

Ambroise Fayolle, vice-president of European Investment Bank, said: “The Investment Plan for Europe is instrumental in enabling the European Investment Fund to boost support for SMEs and mid-caps in need of finance.

“KfW continues to be a crucial partner for us in Germany. By providing risk financing, we can help to strengthen the role of businesses both in Germany and across the European Union.”

Ingrid Hengster, member of KfW’s executive board, said: “Innovation fuels progress and competitiveness. Financing innovation entails a certain level of intrinsic risk. This risk is now being spread between the EU, the European Investment Fund, KfW and the financing partners, making it easier and more affordable for bold entrepreneurs to implement good ideas.”