The European Investment Bank (EIB) and the European Investment Fund (EIF) – jointly the EIB Group – today signed the first guarantee agreements with ProCredit Holding and its subsidiaries in order to support EUR 100 million of lending to small and medium-sized enterprises (SMEs) in Georgia, Moldova and Ukraine under the EU4Business initiative.
These agreements will enable the ProCredit banks in these countries to facilitate access to finance for local SMEs by providing a 70% guarantee on each loan and subsequently extend financing on favourable terms, including with reduced collateral requirements. The three guarantee transactions are expected to unlock additional financing to small and medium-sized businesses and ultimately to sustain jobs and new business opportunities in Georgia, Moldova and Ukraine. These guarantees are funded by the European Union through the Neighbourhood Investment Facility under the EU4Business initiative.
The EIB Group joins forces with the European Union to strengthen economic development in the countries that have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries. The EU supports private sector development in the Eastern Partnership countries through its EU4Business initiative by enhancing access to finance for SMEs, improving the business environment and providing advisory services to local businesses.
Commenting on the transactions, EIB Vice-President Vazil Hudák with oversight for Ukraine and Georgia, said: “Support for SMEs is one of the EIB Group’s priorities because by funding them we are boosting economic growth, innovation and employment. These guarantee agreements with our long-standing partner ProCredit Holding and its subsidiaries will help us to reach SMEs in the countries that have signed an Association Agreement with the EU, increasing access to crucial long-term financing in order to help them continue to develop new projects and generate growth.”
EIB Vice-President Alexander Stubb, with oversight for Moldova, stated: “The support of the EIB Group to strengthen the SME sector contributes to economic diversification and helps increase small businesses’ share of GDP generation. The SME sector is not only significant from an economic point of view but is relevant politically in terms of further development of the middle class, which contributes to political stability and helps raise citizens’ living standards.”
Hubert Cottogni, Head of the Mandate Management Department at the EIF, commented: “This represents an important milestone for the EIB Group as these are the first guarantee agreements which EIB and EIF are jointly supporting in Georgia, Moldova and Ukraine. Thanks to the EU’s financial backing, these transactions will provide significant support to businesses in these countries at a time when access to finance remains a key concern for many companies.”
Borislav Kostadinov, Member of the Management Board of ProCredit Holding, the Frankfurt am Main (Germany)-based parent company of the ProCredit Group said: “We are proud that ProCredit is the first group of banks to sign the guarantee agreements under the EU4Business initiative for its operations in Georgia, Moldova and Ukraine. Thanks to our ‘principal bank’ relationship with a large number of innovative SMEs in these countries, we are confident that these guarantees will support further investments in the modernisation of this sector.”