Investment & Fund Management

The European Investment Fund (EIF) and Erste Bank AD Podgorica have established the first InnovFin SME Guarantee Facility agreement in Montenegro, specifically aimed at supporting innovative small and medium-sized enterprises (SMEs) and small mid-caps. The primary challenge faced by these businesses was the limited access to financing for research, development, and innovation activities, which are crucial for their growth and competitiveness.

To address this issue, the InnovFin agreement allows Erste Bank to provide loans to innovative companies over the next two years, backed by a guarantee from the EIF and supported by Horizon 2020, the EU Framework Programme for Research and Innovation. The guarantee covers 50% of each loan disbursed, facilitating a total loan portfolio of up to EUR 30 million. This tailored solution is designed to encourage banks to lend to SMEs and small mid-caps, thereby improving their access to necessary investment and working capital.

The expected outcomes of this initiative are significant. It is anticipated that the loans will not only support the innovation agenda in Montenegro but also create growth and jobs, providing a substantial boost to the local economy. The EIF's Chief Executive, Pier Luigi Gilibert, emphasized the importance of this agreement in increasing financing for SMEs, which are vital for delivering new products and services. Furthermore, Erste Bank's CEO, Aleksa Luki?, noted that the InnovFin agreement would enable healthier and innovative initiatives to access finance on more favorable terms, ultimately contributing to a new wave of investments within this sector.