OPINION on access to finance for SMEs and increasing the diversity of SME funding in a Capital Markets Union

//OPINION on access to finance for SMEs and increasing the diversity of SME funding in a Capital Markets Union

OPINION on access to finance for SMEs and increasing the diversity of SME funding in a Capital Markets Union

European Parliament 2014-2019

Committee on Culture and Education

2016/2032(INI)
3.6.2016
OPINION
of the Committee on Culture and Education
for the Committee on Economic and Monetary Affairs
on access to finance for SMEs and increasing the diversity of SME funding in a Capital Markets Union
(2016/2032(INI))
Rapporteur: Luigi Morgano

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SUGGESTIONS
The Committee on Culture and Education calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:
1. Recognises the increasing importance of micro-enterprises and SMEs in the cultural and creative sectors (CCS) for investment, growth, innovation and employment, but also in their key role in preserving and promoting cultural and linguistic diversity;
2. Emphasises that, with the publication of the results of the Commission’s ‘Survey on access to finance for cultural and creative sectors’ in October 2013, it has emerged that cultural and creative enterprises have huge difficulties in obtaining access to credit and an estimated financial shortfall of between EUR 8 billion and EUR 13.3 billion;
3. Underlines that Eurostat figures show that 2.9 % of the EU’s workforce, i.e. 6.3 million people, were employed in the cultural and creative sectors in 2014, which is comparable to the proportion of the workforce employed in the banking and insurance sector; stresses furthermore that the cultural and creative sectors make up nearly 4.5 % of the European economy, with nearly 1.4 million small and medium-sized businesses generating and distributing cultural and creative content all over Europe, and that employment in the cultural and creative sectors has continuously increased since 2008, while being among the fastest growing sectors of the European economy, generating about 4.2 % of total EU GDP;
4. Recognises that culture and innovation are crucial factors in helping regions attract investment; highlights the fact that employment in the cultural and creative sectors is unlikely to be offshored, as it is connected to specific cultural and historical competences which also contribute to safeguarding a wide range of traditional arts and crafts; highlights the importance of supporting SMEs that operate in minority or lesser-used languages, which protect and promote the cultural and linguistic diversity of Europe, and the importance of support for start-up projects by young people concerned with cultural protection and heritage;
5. Stresses that further promoting and investing in cultural and creative industries will be beneficial in creating new jobs and combating the youth unemployment rate, given the large number of young people pursuing studies in this area; notes that, according to a recent study, the cultural and creative sectors employed more 15-29-year-olds than any other economic sector (19.1 % of total employment in the CCS versus 18.6 % in the rest of the economy) ; encourages the Member States to enhance the development of cultural and creative competences and to set up business skills development networks between educational and training systems, creative companies and cultural and arts institutions in order to foster an interdisciplinary approach; encourages the EU and the Member States to expand solutions to encourage talent and skills development within the cultural and creative sectors by, for instance, providing for innovative and flexible grants for supporting creativity and innovation and talent development;
6. Points out that, according to the survey conducted in 2013 by the Commission, barriers to access to finance in the CCS have very specific characteristics, in that they have greater difficulty in attracting capital and investment owing to a limited database, a lack of readily available information on sources of funding, a lack of business skills, dependence on public investment schemes, and a lack of sufficient information resulting from problems in assessing risks and valuing intangible property such as intellectual property rights;
7. Stresses therefore that, in order to improve access to finance in the CCS, sector-specific solutions to accessing finance are needed, namely the development of expertise in assessing the specific risks posed by a lack of tangible collateral, a dependence on intangible assets and the uncertainty of market demand in times of digital change; notes that this expertise is needed in both micro-enterprises and SMEs and in financial institutions; stresses that intellectual property rights can be accepted as collateral; underlines the importance of a harmonised legislative framework with provisions on tax and intellectual property in the EU, which could help to attract investment and funding for cultural and creative SMEs;
8. Underlines the need to foster better interaction between the EU and the Member States and to facilitate exchanges of best practices among the Member States, and proposes that there should be more data analysis in order to increase awareness and understanding of the investment and business opportunities offered by companies in the CCS such as measures to encourage digitalisation;
9. Welcomes the launch of the Guarantee Facility of the Creative Europe programme, despite the fact that it has been extensively delayed, as this is one of the key means of addressing the pressing need for accessing loan financing for innovative and sustainable projects in the cultural and creative sectors, encompassing micro-enterprises, SMEs, smaller non-profit associations and NGOs, and one of the key means for guaranteeing the necessary fair remuneration of the creators; welcomes the initiative of the integrated training scheme of the Guarantee Facility offered to bankers and financial intermediaries; strongly recommends that the necessary measures be put in place over the course of 2016, as in the original Commission proposal; recalls that the financing gap is expected to exceed EUR 1 billion per year according to the Commission’s ex-ante assessment, and that this gap is the amount in investments lost as companies with sound business strategies and good risk profiles are either refused a loan or decide not to apply for one altogether because they lack sufficient collateral assets;
10. Welcomes the new report published by the Member States expert group on access to finance for the CCS, a report drafted through the open method of coordination, and emphasises that the recommendations made therein are to be implemented by the Commission so as to create more efficient and innovative instruments and also to facilitate access to finance;
11. Proposes that the financing gap in the CCS can be offset by increasing the interest of the private sector, for which the EU will require a regulatory framework that allows for cross-border equity financing opportunities within the EU;
12. Considers it to be crucial, against the background of cuts in public funding for the cultural and creative sectors, that the EU and its Member States, and its regional and devolved governments and authorities, put in place the preconditions for direct access to capital markets and broaden the range of financing instruments available to micro-enterprises and SMEs in the cultural and creative sectors with new and innovative financing schemes – in the mutual interests of consumers, creators, distributors and publishers – such as microcredits, repayable contributions, crowdfunding, business angels, peer-to-peer lending, tax deductions, risk capital finance, venture capital and the development of public guarantee schemes; notes the importance of investigating the possibilities of innovation procurement under Horizon 2020, and notably by providing incentives for setting up PPPs (public-private partnerships); stresses that information on the available sources of funding should be made available and easily accessible;
13. Notes that together with the capacity building of expertise and credit risk protection, the financial intermediaries will propose promotion plans in their application to the European Investment Fund to help fund sustainable and innovative projects for micro-, small and medium-sized enterprises, including – under specific conditions – cultural public institutions;
14. Welcomes the Commission’s ongoing project on crowdfunding for the cultural and creative sectors, and notes that, in accordance with good CCS finance practices in the Member States, policy and regulatory frameworks should focus on reward-based and donation-based crowdfunding, which have been the methods most frequently used by SMEs in the creative sector;
15. Points out that much more can still be done to bring about the more effective interaction between the European Structural and Investment Funds and other European programmes outlined for the 2014-2020 programming period, with specific reference to Erasmus+ and Creative Europe, in points 4.6 and 6.4 of Annex I to the Common Provisions Regulation , through the provision of better information on an EU-wide basis and by means of much more resolute implementation in the Member States and their regions;
16. Emphasises the role of exchange programmes, in particular mobility in vocational education and training, which enable cooperation between different business lines, combine creativity with business skills and allow participants to better understand the real needs of enterprises; calls therefore for widening the financial opportunities from which CCS SMEs can benefit in order to provide high-quality mobility opportunities.

RESULT OF FINAL VOTE IN COMMITTEE ASKED FOR OPINION

Date adopted 30.5.2016
Result of final vote +:
–:
0: 17
0
2
Members present for the final vote Isabella Adinolfi, Andrea Bocskor, Nikolaos Chountis, Mircea Diaconu, Giorgos Grammatikakis, Petra Kammerevert, Svetoslav Hristov Malinov, Curzio Maltese, Sabine Verheyen, Julie Ward, Bogdan Brunon Wenta, Bogdan Andrzej Zdrojewski, Michaela Šojdrová
Substitutes present for the final vote Rosa D’Amato, Sylvie Goddyn, Ilhan Kyuchyuk, Ernest Maragall, Emma McClarkin, Hannu Takkula

2019-03-06T11:55:23+00:00June 3rd, 2016|RAPPORTEUR|

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