The European Investment Fund (EIF), a part of the European Investment Bank Group (EIB Group), will provide guarantees to UniCredit Group.
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This will allow the lender to originate a portfolio of up to €300 million of financing for Croatian, Bulgarian and Slovak small and medium enterprises (SMEs) with an aim of mitigating the economic consequences of the COVID-19 pandemic.
The EIF guarantees stem from the European Guarantee Fund (EGF), a €25 billion guarantee facility set up by the EIB Group in 2020 to accelerate the post-COVID-19 recovery of the European economy, safeguard jobs, and provide much needed liquidity to European SMEs.
Under EGF guarantees, UniCredit will offer loans to SMEs under more favourable terms including reduced interest rates, longer grace periods, lower collateral requirements or extended maturities. The loans will also be available to SMEs operating in the sectors of economy hardest hit by the pandemic and accelerate the recovery of national economies.
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, and the protection of the jobs and livelihoods of European citizens.
"In response to the COVID-19 pandemic, the EIB Group created the European Guarantee Fund to mobilise up to €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.â€
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". ■