The European Investment Fund (EIF) and UniCredit will provide one billion euros for small and medium enterprises in Croatia, Bulgaria, Slovakia and Slovenia, with Zagrebacka Banka having been allocated up to €325 million for Croatian enterprises.

EIF will provide €700 million in guarantees to UniCredit, allowing the lender to provide up to €1 billion of financing to small and medium enterprises (SMEs) in Bulgaria, Slovakia, Slovenia and Croatia to accelerate the economic recovery from the COVID-19 pandemic, Zagrebacka Banka, a member of UniCredit Group, said in a statement on Tuesday.

Members of UniCredit Group, including Croatia, will offer loans and other financial products to SMEs under more favourable terms including reduced interest rates, longer grace periods, lower collateral requirements or extended maturities. The loans will be available to SMEs operating in the sectors hardest hit by the pandemic and accelerate the recovery of national economies, ZABA said.

Under the guarantee agreement Bulgaria is entitled to up to €185m, Slovakia to up to €310m, Slovenia to up to €80m and Croatia to up to €325m. The remaining portfolio volume will be allocated across the four countries in accordance with the observed demand, it was stated.

The EIF guarantees stem from the European Guarantee Fund (EGF), a €25 billion guarantee facility set up by the EIB Group in 2020 to boost the post-COVID-19 recovery of the European economy, safeguard jobs, and provide much needed liquidity to European SMEs.

Roger Havenith, Deputy Chief Executive of the EIF, 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 (the) 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.”

EIB Vice-President Lilyana Pavlova said the EIB Group stands ready to partner with financial institutions and companies across Europe to support the economic recovery from the COVID-19 pandemic.

Gianfranco Bisagni, Head of Central Europe and Teodora Petkova, Head of Eastern Europe at UniCredit, added: “Thanks to these guarantees and to our strong pipeline we will be able to increase the overall financing up to EUR 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.”