The financing is backed by the European Guarantee Fund (EGF), a part of the EU’s €540bn Covid-19 response package that was announced last year
UniCredit Bank Romania in Bucharest, Romania. (Credit: Babu/Wikipedia.)
UniCredit and European Investment Fund (EIF) have partnered to support small and medium enterprises (SMEs), affected by Covid-19 pandemic, in Bulgaria, Slovakia, Slovenia and Croatia.
EIF will provide €700m in guarantees to the Italian lender, enabling it to offer up to €1bn financing to help the four countries recover from the pandemic.
Under the guarantee agreement, Bulgaria will receive up to €185m, Slovakia up to €310m, Slovenia up to €80m and Croatia up to €325m.
The remaining volume will be distributed among the four countries, as per the demand.
UniCredit Central Europe head Gianfranco Bisagni said: “We are offering continued support to European SMEs and mid-caps that play such a central role in our economies.
“Thanks to these guarantees and to our strong pipeline we will be able to increase the overall financing up to €1bn, being able to further offer our clients favourable terms to manage their liquidity, finance their future investments and drive forward the recovery from the Covid-19 crisis.”
UniCredit would offer loans and financial products to SMEs in the four countries at reduced interest rates, longer grace periods, lower collateral requirements or extended maturities.
The bank will provide the loans to SMEs operating in the sectors most affected by the pandemic, to advance the recovery of national economies, said the bank.
The EIF guarantees stem builds on the European Guarantee Fund (EGF), a €25bn guarantee facility set up by the EIB Group in 2020.
EGF was aimed at supporting the recovery of European economy post-Covid-19 pandemic, safeguard jobs, and provide liquidity to European SMEs.
EIF deputy chief executive Roger Havenith said: “The Covid-19 crisis is still with us and businesses across Europe are experiencing the economic consequences.
“The EIF partnership with UniCredit Group will provide much needed financing for small and medium-sized businesses in four countries.
“Our cooperation will save jobs, boost investments and competitiveness of SMEs and thereby contribute to a faster economic recovery from the Covid-19 crisis.
“I want to thank UniCredit Group for their long-standing partnership and look forward to continued cooperation in the future.”