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EIF and Finnvera: nearly EUR 190 million for SMEs under Juncker Plan

02.09.2019

  • European Investment Fund (EIF) and Finnish specialised financing company Finnvera sign guarantee agreement for nearly EUR 190m of new lending to growth seeking Finnish SMEs.
  • Project supported by EU budget through COSME Loan Guarantee Facility under the Investment Plan for Europe, or Juncker Plan.

Finnish small and medium sized business will receive a further boost in access to finance, thanks to a guarantee agreement signed between the EIF and the Finnish specialised financing company Finnvera, in Helsinki today. The guarantee agreement will facilitate nearly EUR 190 million of new lending for growth seeking SMEs. The operation is supported under the COSME Loan Guarantee Facility, backed by the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe, or Juncker Plan.

Technically speaking, the EIF will ‘counter-guarantee’ Finnvera, which will guarantee lending by local banks, including Aktia Bank plc, Fennia Mutual Insurance Company, Nordea Bank Abp, OP-Services Ltd and Savings Banks’ Union Coop. In fact, the EIF will cover 50% of Finnvera’s guarantee, which in turn will guarantee 80% of the lending by the participating banks. Thus, nearly EUR 190 million in new lending will be made available to Finnish SMEs under the first COSME operation of this kind in the country.

Elżbieta Bieńkowska, European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, said: “Small European businesses that want to grow faster are still facing substantial challenges in obtaining financing. This is why support from EU programmes such as COSME and the Juncker Plan are crucial. I commend Finnvera for taking the initiative in joining forces with the European Investment Fund to help close the financing gap for SMEs in Finland.”

This guarantee agreement ensures that growth-seeking Finnish SMEs have better than before access to financing they need. At the same time it enables Finnish banks to grant loans to a larger number of growth companies. By virtue of EIF’s counter-guarantee Finnvera will not require any collateral from companies applying for our guarantee under this scheme. The guarantee is also very easy to apply for. Growth usually requires financing, and one of our goals is to enable that growth in Finnish SMEs. The benefits of this counter-guarantee will be directed straight to growth-seeking companies.” said Executive Vice President of Finnvera Juuso Heinilä.

Finnvera does not require collateral, which favours businesses who operate in the service, trade or IT sector, for example. It is estimated that at least 2,000 Finnish businesses can profit from this scheme. To apply, companies must have at least three years of activity under their belt and have a positive credit rating.

EIF Secretary General, Maria Leander, added: “Finland is known for its many smaller companies that are leading on the world stage. However, without the right financing even the best business idea might not make it. I’m glad that the EIF, together with Finnvera, can support Finnish SMEs that want to grow, by making available nearly 190 million euros through local banks, thus supporting employment and growth.”

 

Background information

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

Finnvera is a specialised financing company owned by the State of Finland. Finnvera provides financing for the start, growth and internationalisation of enterprises and guarantees against risks arising from exports. Finnvera strengthens the operating potential and competitiveness of Finnish enterprises by offering loans, domestic guarantees, export credit guarantees and other services associated with the financing of exports.

The Investment Plan for Europe, known as the Juncker Plan, is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects. The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. The projects and agreements approved for financing under EFSI are expected to mobilise almost EUR 424 billion in investments, including nearly EUR 9 billion in Finland, and support 967,000 SMEs in the 28 Member States. More information on the results of the Investment Plan for Europe is available here.

COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020 with a total budget of EUR 2.3 billion. At least 60% of the programme is devoted to improving access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. COSME Equity Facility for Growth helps provide risk capital to SMEs mainly in the expansion and growth stages.

 

Press contacts:

EIF: Tim Smit, +352 691 286423, t.smit@eib.org
Finnvera: Kari Villikka, +358 40 750 0022, kari.villikka@finnvera.fi

European Commission: Siobhan Millbright, Tel: +32 (0) 229 57361, siobhan.millbright@ec.europa.eu

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