The European Investment Fund (EIF) and Swedbank on the basis of the COSME multi-country agreement of the European Fund for Strategic Investments (EFSI) increased the funding of small and medium sized companies in the Baltic countries by 160 million euros to 325 million euros, informs LETA/BNS. In relation to the large funding need of Baltic small and medium sized companies (SMEs), Swedbank applied for the limit of COSME to be increased. As of September, the total limit of the new COSME agreement in Swedbank’s Baltic branches is 325 million euros. Increasing the limit by 160 million euros will enable another 1,000 Baltic companies, who do not have a guarantee, to carry out viable investment plans, Swedbank said.
“Cooperation with EIF has been very successful both for Swedbank and our customers,” Liisi Himma, head of corporate banking at Swedbank, said. “Thanks to this cooperation we have been able to finance companies even more flexibly: since July last year we have signed 451 contracts in the total amount of 72.3 million euros. In the bank we will continue looking for options on how to be a good partner for Estonian companies by offering solutions outside the box.”
EIF and Swedbank with the support of EFSI in June 2016 signed the first COSME multi-country agreement in the amount of 165 million euros. EFSI is the main pillar of stability in the European investment plan, the aim of which is to enliven investments into strategic projects in the whole of Europe. EIF will provide Swedbank with guarantees under the COSME program, backed by the European Commission. The agreements will make it possible for Swedbank to substantially reduce collateral requirements for loans and down-payment requirements for leases, to support additional financing at favorable conditions to SMEs that have limited access to finance.
COSME is the EU program for the Competitiveness of Enterprises and Small and Medium-sized Enterprises running from 2014 to 2020 with a total budget of 2.3 billion euros. At least 60 percent of the program will be devoted to ease access to finance for SMEs in Europe, with two financial instruments.
The COSME loan guarantee facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. This facility also includes securitisation of SME debt finance portfolios. The COSME program also invests through the COSME Equity Facility for Growth in equity funds that provide risk capital to SMEs mainly in the expansion and growth stages. The COSME program is based on the Competitiveness and Innovationa Framework Program (CIP) (2007-2013), through which approximately 21 billion euros was given as loans and over 3 billion euros was given as risk capital to more than 381,000 European SMEs.
The European investment plan focuses on eliminating investment obstacles by giving investment projects visibility and technical support and by better using new and existing financial resources. The European Investment Fund is part of the European Investment Bank (EIB) group. Its main task is to support European micro undertaking and small and medium sized companies by helping them get funding. EIF works out and develops both risk and growth capital, instruments linked with guarantees and micro-financing that are specifically directed towards that market segment.
Swedbank is a bank operating mainly in the Baltic countries and Sweden. The bank is listed on the Nasdaq Nordic stock exchange located in Stockholm. Swedbank’s customers include more than 7.3 million private persons and 584,000 companies and organizations. The bank’s headquarters are located in Stockholm.
