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Quarterly tribute:
Creative Change in EU Project Management
- tlab
- 23/07/2025
- 3:53 PM
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COSME: Boosting Entrepreneurship Through EU Funding
COSME empowered Europe’s SMEs with €2.3 billion, fostering entrepreneurship, enhancing internationalization, and leveraging public-private financial instruments. Its scalable model, impact data, and inspiring success stories shape the blueprint for effective SME support in today’s evolving EU funding landscape.
1: Understanding COSME & Key Terms
Q: What is COSME?
COSME stands for the “Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises,” an EU funding program that ran from 2014 to 2020. It supported SMEs—the backbone of the EU economy, accounting for 99% of all businesses and 85% of new jobs.
Q: Why does COSME matter?
It addressed critical funding gaps, SME internationalization, and entrepreneurship promotion, providing €2.3 billion via financial instruments and pan-European networks.
Q: What are SMEs and financial intermediaries?
SMEs: businesses with under 250 employees and below €50 million turnover.
Financial intermediaries: banks or funds delivering EU-backed loans or equity.
Q: What happened to COSME now?
Successor frameworks like InvestEU and Single Market Programme carry forward its principles, with continued access to EU-supported finance for growth.
2. COSME at a Glance: Scale and Focus
COSME operated from 2014 to 2020 with a €2.3 billion budget, prioritizing the competitiveness and sustainability of SMEs in the EU. SMEs generated 56% of EU value added in 2019, and COSME directly targeted their constraints, especially limited access to finance and markets. Over 330,000 SMEs were expected to benefit from COSME guarantees, and the program’s instruments targeted microenterprises—90% of loan recipients had fewer than 10 employees. COSME extended the highly successful Enterprise Europe Network (EEN), whose 600+ partner organizations reached 2.6 million SMEs. By simplifying administrative processes and leveraging both direct and indirect support, COSME ensured its mechanisms addressed real on-the-ground needs, focusing on entrepreneurship, access to markets, finance, and improved business conditions.
3. Financial Instruments: How COSME Bridged the Financing Gap
A chronic SME growth barrier is limited access to capital. COSME’s Loan Guarantee Facility (LGF) offered guarantees and counter-guarantees to financial intermediaries, mobilizing bank loans for riskier SMEs. By 2020, over €6.5 billion in loans were mobilized. The Equity Facility for Growth (EFG) invested in funds supporting expansion-stage SMEs, offering €745 million in equity, expected to help 500+ companies. These blended finance tools catalyzed additional private investment, mitigating risk for lenders while expanding credit options for SMEs—especially new and innovative firms. This multiplier effect leveraged every €1 of EU funding into approximately €4 in market financing, maximizing impact and outreach across the continent.
4. Supporting Market Access and Internationalization
COSME strengthened pan-European networks for SME internationalization, most notably through the EEN. EEN’s 3,000 advisers provided business innovation, legal, and export services directly to SMEs—facilitating over 560,000 business partnership meetings by 2019 and resulting in 42,000 cross-border deals. COSME also funded projects fostering digital uptake, eco-innovation, and knowledge transfer for start-ups. In 2018 alone, COSME dedicated €36 million to internationalization actions, helping companies enter non-EU markets. These access-to-market initiatives were critical as only 25% of EU SMEs engaged in export in 2020; by fostering such participation, COSME boosted competitiveness and growth potential along the full SME lifecycle.
5. Promoting Entrepreneurship: Training, Mentoring, and Gender Inclusion
COSME invested in projects aimed at fostering an entrepreneurial spirit, providing EU-wide training, mentoring, and support to more than 4,000 entrepreneurs. Initiatives like Erasmus for Young Entrepreneurs enabled more than 7,800 cross-border business exchanges. Specific actions targeted women’s entrepreneurship, resulting in over 5,000 new women-led start-ups, and digital entrepreneurship, boosting tech adoption across industries. COSME also enhanced entrepreneurial education in schools and provided resources for business transfer and succession, addressing gaps highlighted by the European Commission, where 450,000 firms and 2 million jobs are at risk each year from failed business transfers.
6. Case Study: BNM d.o.o, Slovenia
BNM d.o.o., an SME in Slovenia specializing in automobile parts, exemplifies COSME’s impact. In 2016, lacking collateral for traditional loans, BNM secured over €490,000 from the Slovene Enterprise Fund with an 80% COSME guarantee. This enabled investment in advanced machinery, planned revenue growth of 43% from €8M to €11.5M (2015–2018), and expansion of the workforce by four people. Productivity gains allowed BNM to eliminate subcontracting and secure new export deals. The COSME guarantee proved crucial—without it, the company would have been forced to settle for less effective, outdated equipment, significantly affecting competitiveness and supplier status.
7. COSME’s Legacy and Lessons for Project Managers
Although COSME concluded in 2020, its methodology persists through InvestEU and the Single Market Programme. Project managers today can partner with experienced financial intermediaries, leverage blended finance approaches, and combine mentorship with funding. Systematic impact measurement is indispensable—COSME tracked number of SMEs financed, new jobs created, and expansion outcomes. EU project managers following these best practices will amplify economic impact, foster entrepreneurship, and advance digital transformation—the cornerstone of the EU’s economic vision. COSME’s €2.3 billion investments continue to inspire and inform project design for sustainable SME growth.