The EIF's activity is centred upon two areas, venture capital and guarantees:
* EIF's venture capital instruments consist of equity investments in venture capital funds and business incubators that support SMEs, particularly those that are early stage and technology-oriented;
* EIF's guarantee instruments consist of providing guarantees to financial institutions that cover credits to SMEs.
Through the leverage effect of its venture capital and guarantee instruments, the EIF is able to contribute to the development of SMEs in the EU Member States and the Candidate Countries. This contribution is in line with the Conclusions of the ECOFIN Council of 7 November 2000, which emphasised the new role of the EIF as the EU specialist financial institution for SMEs.
Both instruments implemented by the EIF for SMEs are complementary to the Global Loans provided by the European Investment Bank to financial intermediaries in support of SME financing. EIF's instruments are implemented on commercial terms.