EIF, Nordea agree to lend EUR 150m to SMEs

The European Investment Fund (EIF) of the European Investment Bank Group has signed an SME Initiative guarantee transaction in Finland with Nordea Bank, said an official press release.

The deal with Nordea Bank will generate EUR 150 million of loans for Finnish businesses and thus improve access to finance for close to 400 Finnish SMEs, including micro companies and start-ups, by ensuring that the banks committed to the SME Initiative offer financing at improved conditions, for example lower interest rates, longer maturities or lower collateral requirements.

The transaction with Nordea Bank now means that Finnish SMEs have access to a total of EUR 370 million in loans from four Finnish banks under the SME Initiative.

“We are excited to be part of the initiative. SME Initiative Finland is very well suited for companies in start-up and growth phases, because it provides them with an alternative for collaterals and, hence, enables investments that would not be made possible otherwise. It is important for us to guarantee our customers access to all sources of financing and the initiative enables us to bolster economic growth in the all-important SME sector,” Nordea Head of Business Banking Finland Sampsa Laine said.

EIF Chief Executive Pier Luigi Gilibert said, “The rapid deployment of the SME Initiative in Finland shows that there is a demand for jointly managed finance products in the country. I am delighted that the signature with Nordea Bank will generate EUR 150 million of loans for Finnish businesses. A total of EUR 370 million of finance is now available for Finnish companies under the SME Initiative and we expect to be announcing new financing opportunities in Finland in the coming months.”

Finnish Minister of Economic Affairs Mika Lintilä said SME Initiative is a great example how the European Commission, EIB Group and the Republic of Finland can improve the access of Finnish SMEs to finance which is crucial for growth and job creation in Finland.

“Nordea Bank joining the SME Initiative as a fourth bank in the short period of time indicates the need for the programme. SME Initiative is a significant financial instrument which supports entrepreneurs wishing to grow and develop their business,” said the minister.

Commissioner for Regional Policy Corina Crețu said, “In less than a year after the launch of the programme, we are about to reach our objective of unlocking EUR 400 million of additional funding opportunities for Finnish businesses. This shows that the SME Initiative delivers, and delivers fast. I hope more countries will join the initiative.”

The SME Initiative is a joint programme blending support from the European Commission, EIB Group and the Republic of Finland with a view to stimulate SME financing by providing partial risk cover for SME loan portfolios originated by financial entities. Alongside EUR 20m of Cohesion Policy funds (European Regional and Development Fund resources) and EUR 20m of national budget contributed by the Republic of Finland, the SME Initiative is co-funded through Horizon 2020 resources as well as benefitting from EIB Group resources.