Public investment bank (BPI France)

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BPI France, also known as Banque Publique d'Investissement, is a French public investment bank created in 2012. It offers a wide range of financing solutions aimed at entrepreneurs, such as loans, guarantees, innovation, and equity.
What are the main aims and objectives?

The main aims and objectives of BPI France are to foster the growth of the French economy by supporting entrepreneurs and businesses at various stages of development. The bank focuses on providing micro-businesses, SMEs, and mid-cap companies with access to specialized financiers and investors. Their objectives also include financing, supporting innovation, and investing in private equity for a multitude of companies. As a trusted partner of entrepreneurs, BPI France champions their growth and success while contributing to the overall economic development of France. 

How does the program work?

BPI France was founded in 2013 with a budget of €20 billion to support entrepreneurs by offering various financial solutions such as loans, guarantees, buyer credit, and supplier credit to encourage business growth. They also help firms develop export activities in partnership with Business France and Coface, and provide support for innovation projects. With over 40 regional offices throughout France, BPI France serves as a powerful contact for businesses, making 90% of their decisions locally. While they mainly support micro-businesses, SMEs and mid-caps, they also support some large caps that are considered important to the French economy.  

The main loan schemes offered by BPI France to entrepreneurs and startups include: 

  1. Innovation loans: Aimed at financing innovative projects, these interest-free loans can cover up to 50% of project expenses, helping businesses launch or develop their innovative products or services.
  2. Growth loans: Tailored for small and medium-sized enterprises (SMEs), these loans are designed to finance their development projects, such as the acquisition of strategic assets, production capacity expansion, or international growth.
  3. Seed loans: Specifically targeting early-stage startups, seed loans provide financial assistance to help entrepreneurs develop their innovative projects and transform their ideas into reality.
  4. EU-backed loans: In collaboration with local financial institutions, BPI France offers EU-supported financing options, including business loans, microfinance, guarantees, and venture capital, to businesses of any size and sector. 

BPI France’s regional offices also provide advisory services to entrepreneurs and startups about the best financing options available to meet their individual needs. Likewise they provide services to coach entrepreneurs and they finance innovator and accelerator projects with 25 SME accelerator programs across France.  

To be eligible for financial support from BPI France, applicants must meet certain criteria, which may vary depending on the specific financial solution they are seeking. Generally, eligibility requirements include: 

  • Legal status: The applicant must be a legally registered company, entrepreneur, or startup in France.
  • Business stage: The company should be in the development, growth, or innovation stage, depending on the financing solution applied for.
  • Project type: The project for which financial support is sought must align with BPI France's objectives, such as promoting innovation, fostering growth, or supporting export activities.
  • Financial health: The company must demonstrate financial stability and the potential for success.
  • Compliance: The applicant must comply with all relevant laws and regulations, both at the national and European Union (EU) level. 
What is the overall cost?

By the end of 2021, Bpifrance had supported over 1.1 million small and medium-sized companies and had an outstanding guarantee amount of €105.6 billion (approx $115.8 billion). 

How was it implemented?

BPI France was established at the end of 2012 as a public investment bank through the mergers of a number of existing bodies in two broad activities; BPI France Financing (formerly OSEO) and BPI France Investment (formerly CDC Enterprises, FSI and FSI Régions).  

2012 – Creation of the Public Investment Bank by the law of December 31, 2012. OSEO, CDC Enterprises and FSI join to form Bpifrance 

2014 – BPI France receives. A boost in funding for projects relating to the social and solidarity economy and support programs to help companies export 

2015 – BPI France begins activity coaching entrepreneurs through the launch of 3 accelerator programs for start-ups, mid-caps and large caps 

2016 – First international offices opened in Düsseldorf (Germany), representing the European area 

2017 – BPI France becomes the French export credit agency with the integration of Coface Garantie publique 

2018 – BPI France becomes the French sovereign fund with the integration of CDC International Capital  

2022 – BPI France is represented all around the world with branches in New York, Mexico, Düsseldorf, Casablanca, Dakar, Abidjan, Nairobi, Dubai and Singapore.  

What impact has been measured?

BPI France demonstrates its impact through a range of impact assessments of individual programs that can be found here. One example of this is an impact assessment of the financial support provided to SME’s innovation projects which found that individual aid from BPI France leads to: 

  • an average additional increase of €36k (approx $39.5k) in total R&D spending per firm in the year of the aid and €250k (approx $274k) in cumulative spending after three years
  • a decrease in privately sourced R&D spending in the initial year, however, cumulatively over three years, individual aid has no impact on privately sourced spending
  • a significant increase in the number of engineers and technical staff in recipient SMEs with an extra 0.4 of these jobs created per SME in the first year and 0.5 over the three year period
  • an overall increase of 0.7 jobs per SME in the first year of aid and1.6 jobs in three years
  • an addition €284k (approx $311k) additional turnover over three years making an average impact of +6%
  • an increase in SMEs exporting and expanding internationally  

An evaluation of BPI Franace’s loan guarantee programs found that:

  • In 2020, about 37,000 companies benefited from a loan guarantee of Bpifrance, of which 90 % are very small companies
  • One third of all new businesses that receive a bank loan have their loans guaranteed by BPI
  • Firms that received a guarantee from BPI have on average 1.7 full time employees, a year after creation
  • 12% file for bankruptcy within 3 years which is higher than those not receiving the guaranteed loan (6%)
  • Despite the higher probability of bankruptcy, the growth rate of firms receiving a guaranteed loan is similar to those receiving non-guaranteed

In 2015, the threshold below which loan guarantees are automatically granted was raised from €100,000 to €200,000. This change was found to create between 460 and 920 new firms per year, create between 920 and 1,840 new jobs per year at a cost to the tax payer of around €6,000 per job.

What lessons can be learned?

One of the lessons to be drawn from the impact assessment of financial support to SME’s innovation projects is that RDI investment funded through aid needs time before its effects can bee see in economic terms.  

Several lessons can be learned from the success and impact of BPI France on the entrepreneurial ecosystem in France. These lessons can be useful for other countries and organizations looking to foster innovation and support small businesses. Some key lessons include: 

  1. Holistic support: BPI France offers a comprehensive range of support services, including financing, guarantees, equity investments, and innovation assistance. This holistic approach enables businesses to access the resources they need at different stages of development.
  2. Collaboration with private and public sectors: BPI France works closely with both private and public partners, including banks, venture capital firms, and regional development agencies. This collaboration allows for better resource allocation and ensures that businesses receive the most suitable support.
  3. Adaptability and responsiveness: BPI France has shown the ability to adapt its services and respond to changing market conditions, such as the COVID-19 pandemic, by introducing new financial support measures for affected businesses.
  4. Monitoring and evaluation: Regular assessments of BPI France's impact help identify areas of improvement and ensure that its services continue to be effective. This data-driven approach allows for continuous refinement of strategies and programs. 
Notes + Additional Context

Click on the link to download : http://www.bpifrance.fr/Espace-Investisseurs

CURATED BY

Jean-Louis Gregoire

Managing Director
Citizen Entrepreneurs
France