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Cultural and creative sector: exploring financial support

Eugene Eteris, BC, International Editor, Copenhagen, 20.03.2020.Print version
Cultural and creative sector, including SMEs, remains poorly exploited and at risk, European Commission acknowledges. Great and important cultural sector’s potentials in all EU states require some support: hence, modern European guarantee’s program is aimed at providing support. The Baltic cultural sphere shall be more active in acquiring these funds.

Specific sub-priorities "Capacity building – new business models" and "Digitisation" in the EU’s culture sub-program aim at encouraging the sector to adapt to a constantly evolving European and international technological and financial environment to explore new rationales and concrete solutions for creating, delivering and capturing financial and social value. 


Already since 2014, these sub-programs include the support for SMEs and business models that enable organisations to develop resilience and financial sustainability as well as developing new manufacturing models based on a global exchange of creative ideas. 


In these innovation paths, the EU’s adopted projects very often contribute to the identification of skills gaps and develop capacity building activities covering those needs. They contribute to designing the jobs of the future and propelling European professionals onto the international market.


More on the support for the sector: https://ec.europa.eu/programmes/creative-europe/culture


Financing cultural sector

Access to finance is more challenging for SMEs in the cultural and creative sectors (CCS) than in any other field and has been identified as a core barrier to growth; e.g. debt financing in the sector accounts for only 2% of the financing of European films totally. Some of the reasons are the intangible nature of CCS assets and collateral issues, the limited size of the market, and the lack of training (on the part of financial intermediaries) to address the sector's specificities. 


In December 2013, the European Parliament and the Council adopted Regulation 1295/13 establishing the Creative Europe Programme (functioning from 2014 to 2020). As specified in the Regulation, the cross-sectoral strand shall facilitate the access to finance for SMEs and organisations from the cultural and creative sectors as well as promote transnational policy cooperation.

 

The European “Cultural and Creative Sectors Guarantee Facility”, CCS GF as the financial instrument of the Creative Europe Programme, improves lending to creative SMEs by offering portfolio guarantees and counter-guarantees to financial intermediaries who offer loans to entrepreneurs in the cultural and creative industries. 


On Creative Europe Programme in:

https://ec.europa.eu/programmes/creative-europe/cross-sector

 

The CCS GF functions since 2016 and the guarantee facility has already experienced strong market demand. The European Fund for Strategic Investment was mobilized to top up the CCS GF by  60 mln EUR, equivalent to 50% of the initial budget (this was deployed in 2018). Further three guarantee agreements with financial intermediaries brought the total to twelve agreements in nine participating countries. Expected debt financing from agreements already signed amounts to over  900 mln EUR; over 800 SMEs and organisations have benefited from loans backed by the CCS GF. 


In addition to the guarantees, the instrument also offers the CCS Capacity Building Scheme, a training programme which helps financial intermediaries better serve creative and cultural SMEs by providing high-level consultancy and support.


A communication strategy, which aims to raise awareness about this new funding opportunity, forms an important part of the CCS GF implementation. A broad range of concerted actions promoted the Creative Europe Guarantee Facility: from video and traditional case studies, through market analysis*) to information days or dedicated workshops with risk and marketing departments of participating banks. 


*) More in: https://www.eif.org/what_we_do/guarantees/cultural_creative_ sectors_guarantee_facility/ccs-market-analysis-europe.pdf

 

Table: Guarantee Facility agreements to SMEs with financial intermediaries (2018)

Belgium: PMV- €15 m; Start SA- €10 m; - Denmark: Vaekstfonden - €40.3 m;

- France: Bpifrance - €30 m; IFCIC - €111.4 m; - Spain: CERSA - €142.9 m;

- Italy: CDP – CERSA - €142.9 m; - Czech Rep.: - Komercni Banka - €25.5 m;

- Poland: BGK - €125 m; - Romania: Libra Internet Bank - €9.9 m.  

 

Some success stories can be seen in the monitoring report prepared by the DG Connect at:  

https://ec.europa.eu/digital-single-market/en/news/creative-europe-publishes-its-monitoring-report-2018






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