Instituicao Financeira de Desenvolvimento S.A. (IFD)
Instituição Financeira de Desenvolvimento (IFD), with headquarters in Porto, has as its main goal to direct public financial resources, preferentially leveraged by private co-financing, and in particular Financial Instruments (FI) of Equity / Quasi-Equity and Mid- to Long-Term Debt, so that “viable” SME may increase their equity capital and finance their investments, while developing their activity in industries concerning tradable goods or services, in the start-up, growth or transfer of ownership stages.
Created on the 21st of October of 2014 by the Decree-Law No. 155/2014, IFD is a State-owned financial company, registered with the Banco de Portugal under number 316, whose object is to perform operations to mitigate market failures in financing to small and medium enterprises (SME), through the management of investment funds, other autonomous sets of assets or instruments of a similar nature, co-financed by public funds to support the economy, and the performance of credit operations, including issuance of guarantees and other commitments.
IFD’s Mission is to design, structure and operationalise financing solutions that address market failures in Portuguese SME access to finance, thus contributing to economic development and to the creation of wealth and employment, with growing volumes of added value.
IFD, a wholesale entity, does not compete with the remaining Financial Institutions in supplying financial products directed to SME. Rather, it acts complementarily with national banks and other private partners, to address existing market failures.
IFD can also provide consulting to SME in capital structure, corporate strategy and related issues, as well as corporate mergers and acquisitions.
IFD’s equity capital is € 100 million. The Portuguese State is its sole shareholder.
During the first phase of its activity, IFD has performed only those initially authorised by the European Commission, i.e., “to manage the financial instrument programmes under the European Structural and Investment Funds (“ESIF”) allocated to Portugal and their reimbursements, and thereby contribute to mitigating market failures in the access of small and medium-sized enterprises (“SMEs”) to finance in Portugal”. As a wholesale institution, IFD acts in partnership with commercial banks, MGS (Mutual Guarantee Societies), investors and other private financial entities, such as Private Equity or Venture Capital companies and Business Angels, as well as existing public institutions that deal with guarantees, especially mutual counter-guarantees.
In November/2016, the European Commission approved the extension of the remit of IFD to the so called Phase 2, including the management of multilateral financing obtained from international financial institutions and/or other national promotional institutions, such as EIB (European Investment Bank) or KfW (Kreditanstalt für Wiederaufbau), working complementarily with commercial banks in access to the market and taking on a wholesale role, whether in On Lending operations (lending to national retail banks funds borrowed from other institutions), or acting as Arranger (organising operations between international institutions and national banks).
Awaiting authorisation is Phase 3, relative to the coordination/integration of State-owned financial companies connected to providing financing to companies, as well as the design of solutions Powered by IFD, distributed through the existing State-owned networks and private partners (namely, MGS, Venture Capital companies, Business Angels, banks, stock market, etc.).
IFD will not directly lend money to companies, even in phases 2 and 3, remaining as a wholesale operator providing financing to private financial intermediaries, following a strict non-competition policy.See more