December 28 (SeeNews) - The European Investment Fund (EIF) and Italian banking group UniCredit said on Tuesday they have teamed up to provide up to 1.0 billion euro ($1.1 billion) support for small and medium-sized enterprises (SMES) affected by the COVID-19 pandemic in Bulgaria, Slovakia, Slovenia and Croatia.
EIF will provide 700 million euro in guarantees to UniCredit, allowing the lender to provide up to 1 billion of financing to SMEs to accelerate the economic recovery of the four countries from the pandemic, the two banks said in a joint statement.
The EIF guarantees stem from the European Guarantee Fund (EGF), a 25 billion euro guarantee facility set up by the European Investment Bank (EIB) group in 2020 to boost the post-COVID-19 recovery of the European economy, safeguard jobs, and provide much needed liquidity to European SMEs.
The guarantee agreement envisages up to allocate loans of up to 185 million euro in Bulgaria, up to 310 million euro to Slovakia, up to 80 million euro in Slovenia and up to 325 million euro in Croatia. The remaining portfolio volume will be allocated across the four countries in accordance with the observed demand, according to the statement.
The UniCredit group members in the four countries, including banks and leasing institutions, will offer loans and other financial products to SMEs under more favourable terms including reduced interest rates, longer grace periods, lower collateral requirements or extended maturities. The loans will be available to SMEs operating in the sectors of economy, which were hardest hit by the pandemic.
EIF is part of EIB banking group. Its main role is to support Europe’s micro, small and medium-sized businesses by helping them to access finance.
The EGF was set up by the EIB Group with contributions from the four countries and other European Union member states to shield companies suffering from the COVID-19 crisis.
($= 0.882 euro)