Five banks have agreed with the European Investment Fund (EIF) to increase a guarantee scheme, whose main objective is to improve companies’ access to finance. In addition to the 400 million euros loan already implemented, a new additional funding of 350 million will be available, the Ministry of Economic Affairs and Employment said in a press release.
The EIF has concluded an agreement with five intermediary banks concerning the additional financing of the Finnish guarantee scheme. Guarantees included in the additional financing of the scheme may be granted by OP Financial Group, Oma Säästöpankki, Aktia Bank, Savings Banks Group and POP Bank Group.
This is a follow-up agreement to one concluded by the Finnish Government with the European Investment Bank Group (EIB Group) and the European Commission in 2016. The EIB Group consists of the European Investment Bank and the EIF. The objective is to increase the number of bank loans granted to SMEs by means of guarantees.
“With the help of the guarantees this additional funding provides, SMEs will be able to borrow more easily during these difficult times,” Minister of Economic Affairs Mika Lintilä says. According to him, all instruments are needed to support companies during the coronavirus crisis and beyond.
By 31 March 2020, 636 guarantees had been granted to SMEs and micro-undertakings. The value of the loans is slightly over 382 million euros.
The guarantee scheme is a programme under the European Union SME Initiative, which will be implemented as an EU-level guarantee arrangement. Under this arrangement, the Member State and the EIB Group have agreed to transfer the implementation of the scheme to the EIF.
The SME Initiative is a financial instrument of the EIB Group aimed at promoting SME financing by partially covering the credit institutions’ risk through loan guarantees.
The EIF is responsible for the implementation of the guarantee scheme.