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International Internet Magazine. Baltic States news & analytics Friday, 31.05.2024, 00:28

Active financial support to SMEs in the Baltic States

Eugene Eteris, RSU/BC, Riga, 26.04.2018.Print version
The European Investment Fund (EIF) and Swedbank agreed to support financially about 5 thousand SMEs in Estonia, Latvia and Lithuania. The EU Programme for Employment and Social Innovation, EaSI participates too. The financial support is aimed at boosting employment in the Baltics and getting more people into jobs, especially the most vulnerable people on the labour market.

The European Investment Fund provides a guarantee which will enable Swedbank Baltic department to provide up to € 123 million financing to micro-businesses in the three Baltic States over the next three years. The deal also benefits from the support of the European Fund for Strategic Investments (EFSI), the core element of the Investment Plan for Europe.


With the help of EU funding, Swedbank is increasing the access to finance in the Baltic States for SMEs and micro-enterprises, including young entrepreneurs and unemployed. This will benefit around 5000 small businesses in Estonia, Latvia and Lithuania.

 

Short on Swedbank

Swedbank’s history goes back to 1820 as Swedish first savings bank. It has presently totally about 7,5 million private and 622 000 corporate customers (4,1 mln and 337 000, correspondingly in Sweden and 3,3, mln and 337 000 in the three Baltic States with 129 000 employees there). There are 50 bank’s offices only in Latvia with about 1 mln clients.

https://www.swedbank.com/about-swedbank/quick-facts/


For e certain period of time, it changed the name to the Hansabank group in 1991; since then, Hansabank (shortly after named Swedbank) has grown to become the largest financial institution in the Baltic States. Thus, in July 1991 Hansabank started first operating in the Baltics with a branch of Tartu Kommertspank (Tartu Commercial Bank) with officially independent operations from January 1992. In autumn 2008, Hansabank changed its name in the Baltic States to Swedbank.

https://www.swedbank.lv/about/swedbank

 

Swedbank's Head of Baltic Banking, Charlotte Elsnitz, said that by providing needed investment capital for micro-enterprises to tens of thousands of companies in Estonia, Latvia and Lithuania, Swedbank has arranged the biggest EaSI guarantee support in the region.  

The guarantee provides both the financing on favorable conditions to more than 5 000 small businesses in Baltic countries and expands access to financing to vulnerable groups such as young people lacking entrepreneurial experience or the unemployed. “This is a step needed to secure a sustainable economic development in the region”, added Ch. Elsnitz.

 

The head of Inclusive Finance at the European Investment Fund, Per Erik Eriksson, underlined that the new EaSI guarantee agreement with Swedbank is going to represent a vital support for micro-entrepreneurs in the Baltic States. The EIF’s guarantee will be instrumental in helping small businesses who are having difficulties in accessing financial support for business.

Financing under EaSI support for micro-enterprises is launched by Swedbank in March 2018.

 

European Investment Fund, EIF

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support European micro, small and medium-sized businesses (SMEs) by helping them access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment.

The Investment Plan for Europe (so-called Juncker Plan), has three objectives: to remove obstacles to investment; to provide visibility and technical assistance to investment projects; and to make smarter use of financial resources.


The Plan consists of three pillars:


• First, the European Fund for Strategic Investments (EFSI), which provides European guarantees to mobilise private investment. In this regard, the Commission works together with its strategic partner, the European Investment Bank (EIB) Group.

• Second, the European Investment Advisory Hub and the European Investment Project Portal which provide technical assistance and greater visibility of investment opportunities, thereby helping proposed investment projects become a reality. The Hub is a joint venture with the EIB Group.

• Third, improving the business environment by removing regulatory barriers to investment both nationally and at EU level. 


The EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

More information on EIF's work under EFSI is available at:

 http://www.eif.org/what_we_do/efsi/index.htm

 

Programme for Employment and Social Innovation, EaSI

The European Commission’s Programme for Employment and Social Innovation (EaSI) aims at supporting EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The EaSI guarantee scheme was launched in June 2015 by the European Commission and managed by EIF.

EaSI provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance for vulnerable groups who want to set up or develop their business and micro-enterprises, notably through loans of up to € 25 000. In addition, for the first time, the European Commission is helping social enterprises through investments of up to € 500 000.


The microfinance and social entrepreneurship support is presently implemented through the EaSI guarantee scheme, which enables financial intermediaries to reach out to micro-entrepreneurs and social enterprises that would not have been able to gain finance otherwise due to risk considerations.


The EaSI represent a EU-wide financing instrument aimed at promoting  quality and sustainable employment, guaranteeing adequate and decent social protection, combating social exclusion and poverty and improving working conditions.

More about the Program: http://ec.europa.eu/social/main.jsp?catId=1081

 

The Investment Plan for Europe, IPfE

The Investment Plan for Europe is one of the EU´s top priorities aimed at boosting investments and creating jobs and growth in the member states by removing obstacles to investment, providing visibility and technical assistance to investment projects, and making “smarter use” of existing and new financial resources.


With guarantees from the European Fund for Strategic Investments (EFSI), the EIB and EIF are able to take on a higher share of project risk, encouraging private investors to participate in the projects. From February 2018, the IPfE is expected to trigger more than € 264 billion in investment among the EU member states.

About the Plan: https://ec.europa.eu/commission/priorities/jobs-growth-and-investment/investment-plan-europe-juncker-plan_en






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