Investment & Fund Management

The European Investment Fund (EIF) has successfully implemented the SME Initiative in Finland, addressing the critical issue of access to finance for small and medium-sized enterprises (SMEs). Prior to this initiative, many Finnish SMEs, including micro companies and start-ups, faced significant barriers in securing financing due to high interest rates, stringent collateral requirements, and limited loan maturities.

To tackle these challenges, the EIF signed its first SME Initiative guarantee transactions with three commercial banks: Ålandsbanken, OP Corporate Bank, and Oma Savings Bank. This collaboration aimed to enhance lending conditions for SMEs by providing partial risk cover for loan portfolios, thereby encouraging banks to offer financing at improved terms. The initiative is designed to leverage a combination of European Structural and Investment Funds, national budget contributions, and resources from the EIB Group, resulting in a more favorable lending environment for SMEs.

As a result of these tailored solutions, the initiative is set to generate over EUR 220 million in financing for approximately 800 Finnish SMEs, significantly contributing to the overall target of EUR 400 million under the initiative. This rapid deployment, occurring just four months after the initiative's launch in Finland, underscores the effectiveness of the program in stimulating SME financing and supporting economic growth. The initiative not only diversifies financing options for SMEs but also reduces administrative burdens, making it easier for businesses to access the funds they need to grow and innovate.