Investment & Fund Management
in collaboration with the European Investment
Full Credential Description
The European Investment Bank (EIB), in collaboration with the European Investment Fund (EIF) and ?eská spo?itelna (?S), initiated a significant financing agreement aimed at addressing the underinvestment challenges faced by small and medium-sized enterprises (SMEs) in the Czech Republic. Over the past three years, approximately 20% of smaller companies in the region reported difficulties in securing adequate investment, which hindered their growth and competitiveness.
To tackle this issue, the partnership facilitated the allocation of EUR 306 million (CZK 7.8 billion) in new financing, projected to benefit around 250 companies and support nearly 43,000 jobs. A key component of this agreement was a guarantee of EUR 76.5 million (CZK 1.96 billion) designed to cover potential losses on an existing portfolio valued at approximately EUR 1 billion (CZK 26.1 billion). This guarantee enabled ?S to enhance its lending capabilities, particularly towards SMEs with riskier business models.
The innovative structure of this transaction not only provided immediate financial support but also aimed to foster the development of the securitisation market in the region. EIB Vice-President Vazil Hudák emphasized that this initiative would strengthen the competitiveness of the Czech economy and contribute to job creation. Furthermore, the collaboration allowed ?S to offer loans at advantageous interest rates, specifically targeting SMEs and MidCaps for both investment and working capital needs, thereby aligning with their strategic objective to support the growth of Czech businesses.
Overall, this financing initiative exemplifies a practical approach to overcoming investment barriers for SMEs in the Czech Republic, showcasing the effective collaboration between European financial institutions to stimulate economic growth and innovation.