A group of nine insurance companies will be extending credit to small and medium-sized busi-nesses (SMEs) through ABN AMRO. The parties involved are presenting a new partnership today, linking the investment capital available at insurance companies to the demand for credit among SMEs. ABN AMRO will play an intermediary role by arranging the credit facilities and managing risks.
The nine insurance companies are Achmea, Aegon, a.s.r., Delta Lloyd, Generali, De Goudse, Natio-nale-Nederlanden, SNS REAAL and VvAA. The insurers and ABN AMRO will invest a total of 280 mil-lion euros in financing SMEs, each contributing half the amount. The risks and returns of the SME loans will also be shared equally between ABN AMRO and the insurance companies. The initiative will be coordinated by the Dutch Association of Insurers.
Access to financing
The partnership will provide loans of up to a maximum of one million euros and a term of at most seven years. Bank loans are the only form of financing available to many small and medium-sized businesses.
For insurance companies, the initiative offers a possibility to invest in SMEs in the Netherlands, a market to which the insurance industry has so far had little access. The partnership has its roots in a report ‘Investing in the Netherlands’, published by the Association of Insurers last year, and offers ABN AMRO new sources of capital and funding. For the bank’s SME customers, nothing will change in terms of the client-facing staff they will be dealing with: ABN AMRO will continue to arrange their loans.
Partnership off to a quick start
The parties will present their new collaboration at the annual event of the Dutch Association of Insur-ers about the role of insurance companies in a changing world. The financing of SMEs is expected to start soon. The partnership will be one of the first joint financing initiatives for SMEs to be actually implemented shortly after the plans have been announced.
The Dutch insurance industry already invests over 60% of its assets in the Dutch economy. With this latest partnership they will invest in loans to promising companies that are in need of financ-ing. In a previous initiative, the nine insurers invested 30 million euros in Qredits, which provides small loans of up to 150,000 euros to small enterprises. Demand for financing is expected to grow as the economy picks up.