August 18 (SeeNews) - The European Investment Fund (EIF) has signed a 12 million euro ($14.3 million) guarantee agreement with Raiffeisen Bank BiH [SAJ:RFSN], the Bosnian unit of Austria's Raiffeisen banking group, to support local small and medium-sized enterprises (SMEs), it said on Tuesday.
The EIF guarantee is provided to Raiffeisen under the COSME Loan Guarantee Facility, as part of its COVID-19 economic support package introduced by the European Union to provide working capital to European SMEs, EIF said in an e-mailed statement.
"Thanks to this rapid action, the coronavirus measure under the COSME Loan Guarantee Facility is already available in more than 20 European countries. With today’s agreement SMEs in Bosnia and Hercegovina will benefit from the EU support for recovery as well," European Commissioner for Internal Market Thierry Breton stated.
The agreement will allow Raiffeisen to extend its current lending and support to a wider range of business clients, even with increased credit risk, including start-ups in the country whose restricted lending opportunities due to high credit risk have been even further narrowed by the pandemic, EIF said.
"This is the first transaction in Bosnia and Herzegovina under the COSME LGF COVID-19 Sub-window, and it delivers on our pledge to support the country to recover faster from the pandemic. Creating a more resilient private sector encourages economic stability and growth, which is essential for supporting the country’s overall recovery," EIF chief executive Alain Godard said in the statement.
COSME is the EU programme for the competitiveness of SMEs running from 2014 to 2020 with a total budget of 2.3 billion euro. At least 60% of the programme is devoted to improving access to finance for SMEs in Europe.
($ = 0.8400 euro)
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