Investment & Fund Management

The Deep and Comprehensive Free Trade Area (DCFTA) Initiative East was launched to bolster economic development in Georgia, the Republic of Moldova, and Ukraine by providing financial and technical support to micro, small, and medium-sized enterprises (SMEs). The initiative, which ran from February 8, 2017, to December 31, 2017, aimed to enhance access to finance for SMEs, thereby supporting economic growth and job creation in these countries. The European Investment Fund (EIF) was entrusted by the European Investment Bank (EIB) to manage the guarantee facility pillar of this initiative, with a total loan volume of approximately EUR 300 million anticipated to benefit SMEs in underserved economic segments.

The DCFTA Initiative East Guarantee Facility (GF) was designed to improve lending conditions by offering selected financial intermediaries a capped first loss portfolio guarantee or counter-guarantee. This included credit risk coverage for the creation of new loan portfolios, enabling local banks to offer better lending terms. The initiative specifically targeted SMEs in the DCFTA East countries, providing them with access to EU-guaranteed loans, which were made available through a network of selected financial intermediaries.

The total EU funding allocated for the DCFTA Initiative East GF was EUR 50 million, sourced from the Neighbouring Investment Facility (NIF) and the EU Support to Ukraine to Re-launch the Economy (EU SURE) program. This funding was part of the broader EU4Business initiatives aimed at aligning the SME sector in these countries with EU standards. The initiative not only facilitated improved access to affordable finance for SMEs but also aimed to stimulate economic activity and employment in the region.