FM Bank signed a guarantee agreement under EPMF for PLN 68m (EUR 17.7m) for financing start-up micro-enterprises

FM Bank signed an agreement with EIF for PLN 68.7m (EUR 17.7m) to offer micro loans to start-ups under the European Progress Microfinance Facility (EPMF). Thanks to the 75% EPMF guarantee, Polish entrepreneurs will have easier access to finance for starting and developing their businesses. Thanks to the guarantee, the bank can now provide loans to start-ups with less than 12 months of business history, which are currently excluded from external financing in Poland.

Commenting on the guarantee agreement Ms Magdalena Dulczewska, CEO of FM Bank said: “Entrepreneurs just starting operations are still treated as a high risk group by banks. That is why, together with EIF, we want to provide financing to start-ups, so needed especially during the first stages of business. The loans below EUR 25,000 will be available to companies which have operated for no longer than 12 months. We believe that with those measures start-ups will get chance to boost their growth significantly”.

Under the agreement, FM Bank offers loans below EUR 25,000 to businesses which were set up less than one year ago.

EIF Chief Executive, Richard Pelly said: “We are pleased to be signing our first agreement in Poland under the European Progress Microfinance Facility initiative with FM Bank. FM Bank’s innovative and flexible approach to financing existing micro-businesses, as well as ensuring early access to capital for start-ups, will help to support entrepreneurs and contribute to the growth of the Polish economy.”

The guarantees are free of charge for final beneficiaries.

About EIF

EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance.  EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF total net commitments to private equity funds amounted to over EUR 5.4bn at end 2010. With investments in over 300 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF commitment in guarantees totaled over EUR 14.7bn in close to 160 operations at end 2010, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

EIF has been involved in the microfinance sector since 2000, providing funding (equity and loans), guarantees and technical assistance to a broad range of financial intermediaries, from small non-bank financial institutions to well established banks, to support the sustainability and expansion of their micro-credit activity.

About the European Progress Microfinance Facility

The European Progress Microfinance Facility (Progress Microfinance) is a new initiative established with EUR 200 million of funding from the European Commission and the European Investment Bank Group. Progress Microfinance aims to increase access to finance for micro-entrepreneurs, including the self-employed. It aims to make it easier for people who might have difficulties in accessing funds for business start-ups. Although it has a particular focus on groups with limited access to the conventional credit market, it is not restricted to these. Examples include female entrepreneurs, young entrepreneurs, entrepreneurs belonging to a minority group, entrepreneurs with a disability, sole traders etc.

Through the European Progress Microfinance Facility, the European Investment Fund provides a guarantee (or funded instruments) to institutions like the FM Bank, enabling it to lend to micro-entrepreneurs. Micro-credit in the EU means loans under EUR 25,000. It is tailored to micro-enterprises, employing fewer than 10 people (91% of all European businesses), and unemployed or inactive people who want to go into self-employment but do not have access to traditional banking services. 99% of start-ups in Europe are micro or small enterprises and one third of these are launched by people who are unemployed.

More information at: www.ec.europa.eu/epmf

About FM BANK S.A.

FM Bank is the first financial institution in Poland to specialise in service of micro- and small companies. The bank’s offer is designed with specific needs of this group of customers in mind, and based on surveys on their preferences and experience of our experts, who have served this market segment for 15 years. We know the recipients of our offer very well and understand their needs. We guarantee simple procedures, flexible approach and individual service style, depending on the specificity of a given industry and range of activity. In customer relationships we are focused on long-term cooperation and consulting based on mutual trust, which in our opinion is fundamental for real partnership in business and reflect what FM Bank perceives to be its mission.

Abris Capital Partners Fund L.P. (special purpose vehicle and the owner of Fundusz Mikro) and International Finance Corporation (IFC), associate of the World Bank Group, specialising in financing projects supporting development of the private sector in Central and Eastern Europe are the main shareholders of FM Bank.

More information at: www.fmbank.pl

Press contacts:

EIF: David Yormesor, d.yormesor@eif.org

FM Bank: Cezary Andrzejczyk cezary.andrzejczyk@fmbank.pl - FM Bank website www.fmbank.pl