The SME Access to finance Initiative will facilitate access to finance for local small and mid-sized businesses through partial portfolio guarantees.
The European Commission, the EU Bank, and the European Investment Bank (EIB) have joined forces in the SME Access to Finance Initiative developed under the European Fund for Sustainable Development (EFSD) in order to support economic growth, Innovation and employment in EU neighboring nations.
This programme will facilitate access to finance for local small and mid-sized businesses (SMEs) through partial portfolio guarantees, the EIB specified on 22 January.
According to the EIB’s statement, those guarantees will allow intermediary banks to take on more risk and extend financing on favourable terms, such as lower Interest Rates and/or reduced collateral requirements.
Furthermore, the initiative will contribute to greater financial inclusion: it will target underserved sectors, like start-ups or businesses run by women or people from disadvantaged communities, the bank said.
The programme is expected to unlock additional financing of some €200 million for small and medium-sized businesses and ultimately to sustain some 18,000 jobs across the target countries.
The EFSD is one of the EU financial instruments that promote a proactive development aid policy supporting investments in the EU neighborhood and Africa.
It is part of the EU External Investment Plan, which by 2020 is expected to generate €44 billion in investments.
