Pension funds, insurance companies and banks have agreed to invest a further €2bn in small and medium-sized firms via two specialist investment funds.

The first fund, ALF, will allow small firms with limited assets to borrow between €150,000 and €5m. The second fund will issue bank loans of between €10m and €25m.

Economic affairs minister Henk Kamp says the new funds, which are being guaranteed by his ministry, are an important step towards structurally strengthening the Dutch economy.

‘Entrepreneurs can attract the necessary funds to invest in new products and services,’ he said. ‘That will create jobs and boost economic growth.’

The cabinet had earlier urged pension funds and insurers to invest in the Dutch economy. Pension funds and insurance companies are investing €800m in the funds. The rest comes from the banks.