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(LUXEMBOURG) – The European Investment Bank and the EU Commission have joined forces in an ‘SME Access to Finance’ initiative to support economic growth, innovation and employment in EU neighbouring countries.
This initiative is to facilitate access to finance for local SMEs through partial portfolio guarantees. Those guarantees will allow intermediary banks to take on more risk and extend financing on favourable terms, such as lower interest rates and/or reduced collateral requirements.
The initiative is seen as contributing to greater financial inclusion: it will target underserved sectors, like start-ups or businesses run by women or people from disadvantaged communities. The programme is expected to unlock additional financing of some EUR 200 million for small and medium-sized businesses and ultimately to sustain some 18,000 jobs across the target countries.
“SMEs are the cornerstone of any economy, especially in the EU Neighbourhood,” said EIB Vice-President Lilyana Pavlova: “Moreover, promoting the underserved sectors’ inclusion in business and unleashing their potential is vital in order to realise the full economic potential of any country. Today they need better access to affordable and long-term finance in order to continue to grow, export to the European market and create new jobs across the region. “
“We want to ensure an investment boost that will drive forward growth and provide concrete benefits and opportunities to the people, for example when it comes to big infrastructure projects or support for young entrepreneurs,” said the Enlargement Commissioner Oliver Varhelyi.
The European Fund for Sustainable Development (EFSD) is one of the EU financial instruments that promote a proactive development aid policy supporting investments in the EU Neighbourhood and Africa. It is part of the EU External Investment Plan, which by 2020 is expected to generate EUR 44 billion in investments (based on an initial EU contribution of EUR 4.5 billion), helping to create jobs and economic opportunities, addressing the socio-economic causes of migration, and contributing to the achievement of the UN sustainable development goals.
