The European Investment Fund (EIF) said it will extend guarantees to Italy-based lender UniCredit, to enable financing of up to 300 million euro ($362.0 million) to support the Covid-19 recovery of small and medium-sized enterprises in Croatia, Bulgaria and Slovakia.
Under the guarantees, UniCredit will be able to offer loans to SMEs under more favourable terms including reduced interest rates, longer grace periods, lower collateral requirements or extended maturities, the EIF said in a statement last week.
The loans will also be available to SMEs operating in the sectors of the economy worst hit by the pandemic and will accelerate the recovery of national economies, EIF added.
"We are offering continuous support to businesses through this initiative in order to manage the liquidity issues caused by Covid-19. This new agreement seeks to guarantee cash flow availability to companies, especially SMEs, which are the backbone of the European economy and generally lack access to capital markets. We thus allow them to finance working capital and investment programs, ensuring proper functioning of production and supply chains," Gianfranco Bisagni, head of UniCredit Central Europe said in the statement.
UniCredit is the parent of the largest lenders in Bulgaria and Croatia - UniCredit Bulbank and Zagrebacka Banka.
The loan guarantees are being extended under the European Guarantee Fund (EGF), a 25 billion euro guarantee fund established by the European Investment Bank (EIB) to accelerate the post-coronavirus recovery of European companies, the EIF noted in its statement.