EIF signs agreements with SEB banka and Swedbank totalling EUR 104 million for financing Latvian SMEs

European Investment Fund (EIF) today signed agreements with SEB banka and Swedbank under which SEB banka will provide loans worth EUR 60 million and Swedbank EUR 44 million respectively to small and medium sized enterprises (SMEs) in Latvia. 

Banks will manage the newly created Funded Risk Sharing product under the JEREMIE Holding Fund (JHF) initiative, designed to stimulate lending from banks to SMEs over the next two year period. The EIF, from Structural Fund and state budget co-financed JHF resources, will provide EUR 30 million to SEB banka and EUR 22 million to Swedbank, which will be matched by an equal amount from the banks, therefore totalling EUR 104 million. These transactions enable both banks to accelerate lending to Latvian SMEs during the current economic recession.

Hubert Cottogni, Head of Regional Business Development, European Investment Fund stated: "This Funded Risk Sharing instrument has been newly designed and developed by the EIF, providing funding and sharing credit risk with banks, thus improving SME access to financing. The EIF is managing this product in several Member States for the benefit of local SMEs and Latvia is one of the first to benefit from it."

„Signature of agreements means that Latvian SMEs will have access to EUR 104m of loans over next few years. Financing is primarily targeted at manufacturing industry, which is one of the most export oriented sectors and its growth provides utmost effective increase to the development of the economy" says Artis Kampars, Minister of Economics.

Kaspars Dēliņš, Member of the Board, SEB banka: "SEB Latvia highly values possibility to support well considered and sustainable projects. Proportion of SMEs in common business environment in Latvia draws up about 98% of overall companies, thus allocation of funding to this group of enterprises ensures functioning of overall national business environment. More and more of these companies, despite the challenging business environment, have been able not only to adapt to current market situation, but even to develop their operation attracting also bank funding. Agreement with the European Investment Fund for financing Latvian SMEs is a confirmation of purpose of SEB Latvia to promote recovery of business environment in Latvia, funding different business ideas."

Daniils Ruļovs, Member of the Board, Swedbank: "Swedbank signed up to be a part of this program based on the conviction that one should always look one step ahead. The terms of the program are in line with Swedbank's general principles of lending. The terms are designed for companies with a solid financial standing - the bank's customers, small and medium sized enterprises mainly working in manufacturing industry and being export-oriented. We aim to provide finance for profitable corporate clients with long-term viability that form the basis for recovery of the Latvian economy."

The Funded Risk Sharing instrument is structured to combine capital from the Holding Fund with capital provided from the bank on an equal basis as well as to share the risk proportionally. Lending to SMEs will be managed by the banks under normal market terms and conditions.

The EIF is also implementing a number of other financial engineering instruments using the Holding Fund structure in Latvia, with venture capital fund managed by BaltCap Management Latvia already operational and accessible to SMEs looking for investments, and seed/start-up fund managed by Imprimatur Capital Baltics expected operational in May.

About JEREMIE
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007 - 2013. JEREMIE enables the EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs in a flexible and innovative way. Since the products will be provided on a repayment basis, funding will be reinvested and hence more SMEs will benefit from the EU resources.

In Latvia JEREMIE Holding Fund is financed from the EU Structural Funds under 2007-2013 Operational Programme "Entrepreneurship and Innovations".  

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 4.1bn at end 2009. 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 13.6bn in over 160 operations, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

About SEB banka
SEB banka, member of SEB - a Northern European financial group - is one of largest banks in Latvia offering a full range of banking services to private and corporate customers and financial institutions. SEB banka serves more than 900 thousand customers all over Latvia and through the universal banking concept, SEB provides top-of-the-line product offerings comprising life insurance, asset management, investment banking and full-fledged financial services.  

About Swedbank
Swedbank's vision is to be the leading financial institution in the markets where the Group is present.  Swedbank has 9,5 million retail customers and 550,000 corporate customers in the Baltic countries, Ukraine and Sweden. The Group is also present in Denmark, Finland, Russia, Luxembourg, Spain, USA, Norway, China, and Japan. As of December 31 2009 the group had total assets of SEK 1,795 billion and approximately 19,000 employees. For more information about Swedbank group, please visit www.swedbank.com. For more information about Swedbank in Latvia, please visit www.swedbank.lv. 

Contacts:
EIF David Yormesor, EIF Communications Unit, tel +352 426 688 346, e-mail inforbd@eif.org
SEB banka Agnese Strazda, Head of Communications, tel: +371 67215521, cell: +371 29149306, e-mail: agnese.strazda@seb.lv
Swedbank Kristīne Jakubovska, Press officer, tel: +371 67444560, cell: +371 29128208, e-mail: kristine.jakubovska@swedbank.lv