European Investment Fund (EIF) and UniCredit sign umbrella guarantee agreement under the Pan-European Guarantee Fund to support SMEs affected by COVID-19 in Bulgaria, Croatia and Slovakia
Guarantees fall under Pan-European Guarantee Fund (EGF), a EUR 25 billion guarantee fund established by the EIB Group to accelerate post-COVID recovery of European companies.
The uncapped guarantee provided by the European Investment Fund covers 70% of the loan exposure up to a total of EUR 300 million, has been signed with local banks in Bulgaria, Croatia and Slovakia to support working capital and investment finance under the EGF.
European Investment Fund and UniCredit entered into an umbrella guarantee agreement in response to the COVID-19 pandemic, offering support to companies in Bulgaria, Croatia and Slovakia under the Pan-European Guarantee Fund (EGF).
The guarantee will allow UniCredit to offer working capital and investment loans to SMEs guaranteed by the EIF at a rate of 70%. The portfolio of such lending is expected to reach up to EUR 300 million.
Gianfranco Bisagni, Head of Central Europe at UniCredit said: "We are offering continuous support to businesses through this initiative in order to manage the liquidity issues caused by COVID-19. This new agreement seeks to guarantee cash flow availability to companies, especially SMEs, which are the backbone of the European economy and generally lack access to capital markets. We thus allow them to finance working capital and investment programs, ensuring proper functioning of production and supply chains. At UniCredit, we work with our countries and engage in decisive and concrete measures to be part of the solution, helping companies and the local economies especially in light of the emergency we are living".
Roger Havenith, Deputy Chief Executive of the EIF said: “The EIF operation with UniCredit is good news for SMEs in Croatia, Slovakia and Bulgaria as it unlocks urgently needed financing for COVID-19 recovery, the protection of jobs and livelihoods of European citizens. In response to the COVID-19 pandemic, the EIB Group created the European Guarantee Fund to mobilize up to EUR 200 billion in investments and accelerate the recovery of the European economy. Today, five months after its launch, the EGF is half way to meeting this ambitious goal and I would like to thank UniCredit for contributing and partnering with us in this effort to support European businesses.”
As of March 31st 2021 UniCredit in the CEE countries had 37 established guarantee schemes from IFIs and local development banks in total capacity of about EUR 5,1 billion, out of which EUR 2,7 billion was already utilized, and EUR 2,4 billion available for lending support in the region within the next 2-3 years.
Since the start of the COVID-19 pandemic UniCredit has been providing quick response to the market and doubled its risk sharing capacity, continuing to finance its clients in this unprecedented time. The main increase in the support solutions, about EUR 2 billion, was achieved thanks to the new local COVID-19 related governmental programs, that UniCredit successfully channeled through its network in CEE.
As for the cooperation with IFIs, UniCredit extended the support solutions with EIB Group, implementing upgrades to the existing facilities (InnovFin, COSME) and designing new ones, such as this new EGF uncapped guarantee umbrella facility.
The UniCredit banks in Bulgaria, Croatia, and Slovakia will benefit from this new guarantee scheme, the protection shield for EU businesses and one of the financial pillars of the EU economy recovery.
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance 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. More information on EIF's work is available here.
UniCredit is a simple successful Pan European Commercial Bank, with a fully plugged in Corporate & Investment Banking, delivering a unique Western, Central and Eastern European network to its extensive and growing client franchise. Client needs are met with solutions which harness synergies between business divisions: Corporate & Investment Banking, Commercial Banking and Wealth Management. The way in which these solutions are developed and provided is as important as the solutions themselves, which is why everything is based on two core values: ethics and respect.
By focusing on banking that matters, UniCredit offers local and international expertise, providing unparalleled access to market leading products and services in 13 core markets through our European banking network. Leveraging on an international network of representative offices and branches, UniCredit serves clients in another 16 countries worldwide.
About the Pan-European Guarantee Fund
The Pan-European Guarantee Fund is established by EIB Group and participating EU member states in response to the COVID-19 pandemic. Its total capacity of EUR 25 billion will help businesses recover from the pandemic, hire employees and grow. By mobilizing extra finance from the private sector, EGF aims to generate up to EUR 200 billion for the EU economy.
The EGF provides guarantees to free up capital for national promotional banks, local banks and other financial intermediaries in order to make more financing available for small and medium companies, mid-caps and corporates.
The participating countries in the European Union provide guarantees proportional to their share in the EIB or other institutions. The EGF Contributors’ Committee, made up by representatives from these countries, decides on the availability of the guarantees.
The guarantees will cover losses that may occur in the EGF operations of the EIB Group - including the EIB and its specialized SME-financing arm, the European Investment Fund.
Additional media information:
Ekaterina Ancheva, tel +359 (0) 2 9264 963, flbufsjob/bodifwbAvojdsfejuhspvq/ch