SME Bank, the neobank startup that offers banking and financial services specifically for small- and medium-sized enterprises, has signed a new partnership contract with the European Investment Fund (EIF) unlocking €157 million in loans (€65 million of which has already been financed) to foster growth and development among SMEs across the Baltics, Finland, and the Netherlands. With EIF guarantees of up to 80% and micro-financing opportunities up to €50,000 with no collateral requirement, the agreement offers businesses the chance to borrow on more favourable loan terms for investments in sustainability, innovation, and digitization. The InvestEU Fund is implemented through financial partners who invest in projects using the EU budget guarantee of €26.2 billion, aiming to mobilise at least €372 billion in additional investment.

The latest edition of the European Commission’s  Eurobarometer on SMEs, resource efficiency and green markets, published in March 2023, reveals that EU SMEs have already undertaken meaningful actions to transition their business operations towards environmental sustainability. However,the report also reveals that many SMEs are experiencing barriers to more sustainable practices, digitalisation, and innovation. 

Recognizing the importance of SMEs in the economy, the European Union (EU) has implemented initiatives to enhance access to microfinance, including providing financial support, simplifying administrative procedures, and encouraging collaboration between financial institutions and SMEs. Today’s agreement with SME Bank is part of the EU’s drive to foster sustainability, innovation, and digitalization among SMEs by promoting access to microfinance. 

EIF sustainability guarantees for more than €33,33 million in new debt financing will stimulate green transitions for small and medium-sized businesses and small mid-caps. By accelerating the adoption of sustainable practices, these companies will contribute to building a greener and more sustainable future.

Under the €33,33 million innovation and digitalization guarantee, SME Bank will further support enterprises driven by these goals. This allocation will enhance access to finance for research and innovation-intensive businesses, while promoting the adoption of digital technologies and the transformation of companies.

Furthermore, with the €25 million microfinance guarantee, SME Bank will empower microenterprises, enabling enhanced access to finance for these smaller businesses. Companies with up to 10 employees and yearly revenues of up to €2 million will have the opportunity to obtain up to €50,000 without the need for collateral. This provision will fuel entrepreneurship and innovation among the micro-business community.The credit facility will cater to both investment needs and working capital requirements.

SME Bank CEO, Virginijus Doveika, says: "SME Bank is committed to helping SMEs obtain the financing needed to implement innovations, expand, or create new jobs. This important agreement with the EIF commits us to promoting investments aimed at sustainability and the green transition. Sustainability is no longer merely a social responsibility; it has become an integral part of business. However, many small businesses face challenges in accessing financing for crucial projects or innovations. I am confident that our latest, €157 million partnership with the EIF has huge significance for companies, particularly smaller ones, which can significantly contribute to economic growth and help the EU achieve its climate and other policy goals."