(Bloomberg) -- The French government plans changes to its state-backed financing program for small firms that was designed to fuel investment after the worst of the Covid-19 crisis as it's met with little success, Finance Minister Bruno Le Maire said.
The financial instruments, known as participative loans, were meant to ween small companies off a reliance on debt by offering a product that has some of the advantages of equity. When the plan was launched in March, Le Maire said it could deliver as much as a 20 billion-euro ($23.5 billion) boost to balance sheets and serve as model for other European economies trying to turbo-charge the economic recovery.
“Today, participative loans don't meet the expectations of companies,” Le Maire said at the Medef conference of business leaders in Paris.
The need for fresh sources of financing is not as great as the government expected because of vast support from other sources including state-guaranteed loans, the finance minister said. He has ordered government officials to discuss with businesses and banks how to revamp the plan to make it more attractive and “better for rebuilding capital and therefore more effective for investment.”
A finance ministry official declined to provide figures on how many participative loans have been issued.
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