EU4Business Capped Guarantee

In a coordinated European response to supporting the private sector and SMEs in particular in the EU partner countries, the EIB and the EIF have worked with the Commission (DG NEAR) to secure the financial resources of deploying a new capped portfolio guarantee for the benefit of SMEs in five Eastern Partnership countries (Armenia, Azerbaijan, Georgia, Moldova, Ukraine).

The new ‘EU4Business Guarantee Facility’ aims to deploy €40 million of resources through financial intermediaries in these countries, thereby mobilising a new SME debt financing portfolio of significant size. In this facility, EIF will leverages its expertise in SME financing and act as the transaction agent (including the selection of intermediaries via the open call for expression of interest), while the EIB will front the guarantee as guarantor of record.

The origination activity to small businesses under this portfolio is expected to include local currency lending in a material manner, which is expected to play a role in boosting access to finance for small businesses in this region. Benefits of the EU support for SMEs may include reduced collateral requirements or lower financing costs, among others.

The ‘EU4Business Guarantee Facility’ builds on the achievements of our previous DCFTA Initiative East Guarantee Facility that has supported close to 1900 SME transactions for more than €240 million portfolio volume so far.

Financial intermediaries – application information