SME credit guarantee scheme (BMKB)

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The SME credit guarantee scheme (BMKB) in the Netherlands is a financial initiative aimed at helping small and medium-sized enterprises (SMEs) gain access to credit.
What are the main aims and objectives?

The primary objective of the BMKB is to enhance the borrowing capacity of SMEs. By providing a government-backed guarantee, the scheme offsets the risks for lenders, making them more inclined to offer loans to businesses that may otherwise struggle to secure financing due to a lack of collateral. The scheme aims to stimulate economic growth by ensuring that SMEs, which are the backbone of the Dutch economy, have the necessary funds to invest in their operations, hire more staff, develop new products, and expand into new markets. Additionally, BMKB acts as a safeguard during economic crises, such as the COVID-19 pandemic, by providing additional support to SMEs that are struggling due to the downturn.

How does the program work?

BMKB operates by providing a government-backed guarantee for loans applied for by small and medium-sized enterprises (SMEs). Businesses interested in the scheme don't apply for the guarantee directly. Instead, they apply for a loan from one of the participating banks or other funders. These financial institutions then submit an application on behalf of the business to the Netherlands Enterprise Agency for the guarantee. The Ministry of Economic Affairs and Climate Policy acts as the guarantor for the loans.

This scheme guarantees 67.5% of a new loan for start-ups and for small credit requests. For innovative firms, it secures 60% of a new loan. The percentage falls to 45% for other new loans. The maximum amount of BMKB credit is €1.5 million. The BMKB scheme improves the company's collateral, thereby increasing the financing options for the company, both now and in the future. The exact loan terms, including the interest rate and repayment period, are determined on a case-to-case basis by the participating lenders.

To be eligible for the scheme, businesses must meet the following criteria:

  • They need to be established in the Netherlands or certain Dutch territories,
  • Employ 250 workers or less
  • Have an annual revenue of €50 million or less
  • Have a balance sheet totalling €43 million or less
  • They must need the loan for a business-related purpose, such as buying equipment, hiring staff, or expanding operations.
What is the overall cost?

The total budget for BMKB is €1.5 billion of which €1.35 billion is for banks and €150 million for non-banking financiers. 

How was it implemented?

The BMKB scheme was created in 2020 to support SMEs in the context of environmental legislation that was seen to adversely impact them. The scheme has since evolved to become an essential part of the Netherlands' economic strategy to support SMEs. In response to the COVID-19 pandemic, the Dutch government expanded the BMKB. The government guarantee increased to 75%, the credit duration was extended to four years, and the interest rate dropped. The development and establishment of the BMKB scheme involved consultation with social partners, and regular consultation between the government and social partners has taken place since the start of the pandemic. The scheme has been expanded and extended until June 30, 2027, to further support businesses.

What impact has been measured?

As of May 2021, the scheme had been used by 4,110 companies, with a total of €524 million pledged. No further information is available on the wider impact of this policy on the economy.

What lessons can be learned?

The evolution of the BMKB scheme demonstrates the high level of demand for easier access to credit amongst startups and SMEs. Moreover, the flexibility shown by policy makers in expanding and repurposing the scheme to meet the needs of companies during different crises should be applauded and considered by policymakers when designing similar support schemes.

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom