Investment & Fund Management

The European Investment Fund (EIF) and Kreditgarantiföreningen Norr ekonomisk förening (KGF) entered into a partnership to support micro-enterprises in Sweden through the EU Programme for Employment and Social Innovation (EaSI). The specific challenge faced by KGF was the need to provide financing solutions to micro-borrowers who were often excluded from mainstream credit options. This partnership aimed to address the financing gap for approximately 250 micro-entrepreneurs across Sweden, particularly those lacking access to traditional banking services.

The tailored solution involved a guarantee agreement covering a loan portfolio of SEK 45 million (approximately EUR 4.6 million). This agreement allowed KGF to offer loans on preferential terms, including reduced collateral requirements, lower interest margins, and decreased guarantee fees. Additionally, the micro-borrowers would receive individual business support, such as mentoring and training, enhancing their chances of success in establishing or growing their businesses.

As a result of this initiative, KGF was empowered to expand its geographic reach and improve the overall microcredit market in Sweden. The agreement not only facilitated easier access to capital for small businesses but also contributed to the creation of new jobs and the development of innovative business ideas. The EIF's backing was crucial in enabling KGF to provide these financial solutions, ultimately fostering entrepreneurship and economic growth in the region.