The European Investment Fund (EIF) and Pohjola Bank (as part of the OP Financial Group), have signed a guarantee agreement to increase lending to innovative small and medium-sized enterprises (SMEs) and small mid-caps in Finland, Lithuania, Estonia and Latvia. This transaction benefits from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe.
The new agreement will allow OP Financial Group to provide EUR 150m of loans to innovative companies in Finland and the Baltic states over the next 2 years. The loans will be supported by an EIF guarantee under the “EU InnovFin finance for Innovators” initiative with financial backing from the European Commission's Horizon 2020 programme. The agreement signed today will make it possible for Pohjola Bank and its 180 cooperative banks to offer innovative companies additional financing at favourable conditions.
Commenting on the agreement, European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The agreement being signed today between the EIF and Pohjola Bank will make new risk financing available to small businesses in Finland, Estonia, Latvia and Lithuania. These countries have thriving start-up scenes and excellent credentials when it comes to innovation. With the support of the Investment Plan, we will help SMEs in the Baltic states grow their businesses and create more jobs locally."
EIF Chief Executive, Pier Luigi Gilibert commented: “The signature with Pohjola Bank heralds the first multi-country EFSI SME signature in Europe for innovative SMEs. Together with Pohjola Bank, with its wide network of branches across 4 countries we can enhance access to finance for innovative companies via the InnovFin SME Guarantee facility”.
Reijo Karhinen, Chief Executive of OP Financial Group commented: “Supporting SME's to innovate and invest is key to growth in Finland's economy. We are very pleased to have been selected as the first intermediary bank for EFSI in Finland and are convinced that through our extensive network, innovative SME's will have better access to financing."
This is the first InnovFin transaction in Finland signed thanks to EFSI support. The deal reflects the EIB Group’s commitment to respond swiftly to calls from Member States, the European Commission and the European Parliament for a rapid launch of concrete initiatives under EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.
About the European Investment Fund
The European Investment Fund's (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. EIF designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
About OP Financial Group and Pohjola Bank
Pohjola is part of OP Financial Group, Finland's leading financial services group providing a unique range of banking, wealth management and insurance services. Based on its mission, OP creates sustainable prosperity, security and wellbeing for its owner-customers and in its operating region by means of its strong capital base and efficiency. OP Financial Group consists of about 180 member cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. The Group has a staff of 12,000 and 4.3 million customers.
Pohjola acts as OP's central bank and is responsible, together with OP Mortgage Bank, for OP's funding in money and capital markets. As laid down in the applicable law, Pohjola, its parent company OP Cooperative and other OP Financial Group member credit institutions are ultimately jointly and severally liable for each other's debts and commitments.
About the Investment Plan for Europe
The Investment Plan focuses on removing obstacles to investment, providing visibility and technical assistance to investment projects and making smarter use of new and existing financial resources. The Investment Plan is already showing results. The European Investment Bank (EIB) estimates that by February 2016, the European Fund for Strategic Investments (EFSI) triggered more than €60 billion of investment in Europe.