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 injection of EUR 306 million (CZK 7.8 billion) into the SME sector, which is 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 tailored solution not only provided essential financing for investments and working capital but also aimed to stimulate the development of the securitisation market in the region. EIB Vice-President Vazil Hudák emphasized that this innovative transaction would bolster the competitiveness of the Czech economy and contribute to job creation. The collaboration between EIB and ?S, which has been ongoing since 2002, has previously resulted in loans and guarantees totaling EUR 1.45 billion, further enhancing access to long-term financing for Czech companies.
Overall, this initiative exemplifies a strategic approach to overcoming financial barriers for SMEs, fostering economic growth, and creating better-paying jobs through enhanced access to necessary funding.