On 13 September 2016, the European Investment Fund (EIF) and ProCredit Bank Ukraine signed a loan guarantee deal that will offer small and medium-sized companies in Ukraine easier access to risk capital for the development of innovative ideas.
The EU-funded deal will allow the bank to more securely enter into loan agreements with companies of below 500 employees, as any potential losses on loans for innovative activities will be guaranteed by 50% by the EU under the loan guarantee scheme. Overall, the scheme is to generate a portfolio of €50 million in loans to innovative companies over the next two years.
Carlos Moedas, European Commissioner for Research, Science and Innovation, said: 'I am pleased to announce that Ukrainian companies can now benefit from EU-guaranteed loans up to €50 million to boost their research and innovation potential. The deal signed today will support Ukraine's economy, and it is a testimony to the productive relationship between the EU and Ukraine under Horizon 2020, the EU's research funding programme.'
This deal falls under the InnovFin SME Guarantee Facility, which is part of the new generation of financial instruments supported under Horizon 2020. Under this facility, financial intermediaries are guaranteed against a proportion of any losses incurred on the debt financing covered under the facility.
InnovFin SME Guarantee Facility is part of 'InnovFin – EU Finance for Innovators', the new generation of EU financial instruments and advisory services that was developed under Horizon 2020 to help innovative firms access finance more easily. It will help inject up to €48 billion in investments in Research and Innovation across Europe.
InnovFin SME Guarantee Facility provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million, in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The facility is managed by the EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries.
Source: European Commission