The European Investment Fund (EIF) and ProCredit Bank Georgia signed an InnovFin agreement in Luxembourg today that will benefit innovative Georgian small and medium-sized enterprises (SMEs) and small mid-caps.
The InnovFin agreement, the first of its kind in Georgia, will enable ProCredit Bank Georgia to provide loans to innovative companies over the next two years with the support of a guarantee provided by the EIF and backed by Horizon 2020, the EU Framework Programme for Research and Innovation. The InnovFin guarantee covers 50% of each loan disbursed by ProCredit Bank Georgia and is expected to generate a total loan portfolio of EUR 50 million.
Carlos Moedas, European Commissioner for Research, Science and Innovation, said: “Horizon 2020, our research and innovation programme, is open to the world, and a productive relationship with Eastern Partnership countries such as Georgia is an important part of our strategy. This deal takes our cooperation with Georgia one step further. It will support Georgia’s economy, as Georgian companies can now benefit from EU-guaranteed loans to boost their research and innovation potential”.
Commenting on the signature, the EIF’s Chief Executive, Pier Luigi Gilibert, said: “I welcome the signature of this first InnovFin agreement in Georgia. Today’s agreement will enable ProCredit Bank Georgia to expand its financing activities, which will allow innovative Georgian companies to benefit from more attractive loans.”
Alex Matua, Director of ProCredit Bank Georgia, said: “The InnovFin programme is very important for ProCredit Bank Georgia, as it gives us the possibility to develop further and finance the businesses that we believe are the core of the economy. We focus on small and medium enterprises that have innovative vision and embrace modern European standards. They are planning their future development and we are the financial institution that always supports them.”
Borislav Kostadinov, member of the Management Board of ProCredit Holding, added: “We are very pleased to announce that the InnovFin guarantee agreement, which has already been successfully implemented in eight of our banks in South Eastern and Eastern Europe, will now be introduced in Georgia, thereby easing access to financing for innovative Georgian SMEs. Of the amount allocated to the ProCredit group in 2016, one third has already been utilised to support innovative companies over the course of the year.”
The aim of the InnovFin SME Guarantee is to encourage banks or other financial institutions to lend to SMEs and small mid-caps (up to 499 employees) in need of investment and/or operating capital to finance research, development and innovation activities, with EU financial support. Financial institutions are being selected by the EIF following a call for expression of interest for financial intermediaries across Europe.