The European Investment Fund (EIF) and ALTUM, a state-owned development institution in Latvia, have signed a microfinance guarantee agreement under the EU Programme for Employment and Social Innovation (EaSI). This new financing agreement was made possible by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe. Micro-entrepreneurs will be able to benefit from loans at a reduced interest rate with lower collateral requirements under the EU supported programme.
This new EaSI guarantee agreement allows ALTUM to provide loans to 600 micro-entrepreneurs over the next 3 years across Latvia. Micro-entrepreneurs will be able to benefit from loans at a reduced interest rate with lower collateral requirements under the EU supported programme. ALTUM will primarily target start-ups and small businesses.
Commissioner for Employment, Social Affairs, Skills and Labour Mobility,Marianne Thyssen, said: “With the help of EU funding, ALTUM will improve access to finance for about 600 micro-enterprises in Latvia, many of whom face difficulties in accessing credit from traditional banking sources. This new EaSI guarantee agreement will allow micro-entrepreneurs to benefit from loans with favourable conditions. This shows again that the European Commission, through the EaSI programme, is fully committed to boosting employment in Europe and getting more people into jobs.”
Pier Luigi Gilibert, EIF Chief Executive: “I am pleased that the joint agreement will help Altum to launch a new micro lending product addressing the financing needs of micro-enterprises in both start-up and development phases. Supporting borrowers who are at risk of social exclusion and face difficulties in accessing the credit market helps to drive forward an inclusive entrepreneurship culture. ”
Reinis Bērziņš, CEO of ALTUM: “The cooperation agreement with EIF is a testimony that local market investments by the European Union through various financial instruments is not an abstraction. This cooperation grants as an opportunity to provide independent support to microenterprises who could then apply for necessary equity investments. Main beneficiaries of this programme are recently established companies and those with miniscule turnover – they can access funding up to EUR 25,000 with just a personal guarantee and no collateral. We are excited about this EaSI agreement because it will grant companies access to funding under favourable conditions, thus promoting sustainable economic growth of microenterprises.”
The EaSI Guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund. EIF will not provide direct financial support to enterprises but will implement the facility through local financial intermediaries, such as microfinance, social finance and guarantee institutions, as well as banks active across the EU-28 and additional countries that are participating in the EaSI programme. These intermediaries will deal with interested parties directly to provide support under the EaSI Guarantee.
