The European Investment Fund (EIF) signed two agreements to enable SEB banka and Swedbank to provide loans worth €104m to small and medium sized enterprises (SMEs) in Latvia within the framework of the newly created Funded Risk Sharing product under the JEREMIE Holding Fund (JHF) initiative.
The Funded Risk Sharing instrument is properly 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.
In this case, the EIF, from Structural Fund and state budget co-financed JHF resources, will provide €30m to SEB banka and €22m to Swedbank, which will be matched by an equal amount from the banks, therefore totalling €104m.
Lending to SMEs will be managed by the banks under normal market terms and conditions.
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is the joint initiative launched by the European Commission 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. It enables EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs through repayable instruments.
In Latvia, the JEREMIE Holding Fund is financed from the EU Structural Funds under 2007-2013 Operational Programme “Entrepreneurship and Innovations”.
In the country, the EIF is also implementing other financial engineering instruments, with venture capital fund managed by BaltCap Management Latvia already operational, and seed/start-up fund managed by Imprimatur Capital Baltics expected operational in May.