The European Investment Fund (EIF) and the State JSC Mortgage and Land Bank of Latvia signed a guarantee agreement under the Competitiveness and Innovation Framework Programme (CIP), which will provide enhanced access to finance for small and medium enterprises (SMEs) in Latvia.
The CIP guarantee will help State-owned Hipoteku Banka providing both investment loans and working capital loans to SMEs involved in knowledge-based businesses, such as IT, innovations and introduction of technology. Under the agreement, Hipoteku Banka will be able to better target startups and recently created companies, which will receive loans with smaller warranties than usual.
The CIP, which spans from 2007 to 2013, is the EU Programme aimed to boost the European productivity, innovation capacity and sustainable growth. In its framework, the EIF manages the SME Guarantee Facility (SMEG), which allocates additional financing volumes for those businesses that would not otherwise have access to resources because of the increased lending risk entailed.