EIF from EIB group plans 8 guarantee agreements in Ukraine, attracting EUR 150 mln in guarantee capital for 2026

The European Investment Fund (EIF) from the European Investment Bank (EIB) group, which is the EU’s instrument for financing small and medium-sized enterprises, plans to add eight more to the 16 signed guarantee agreements in Ukraine this year, EIF department head Martins Jansons said, an Interfax-Ukraine correspondent reports.

"This year, we plan to attract guaranteed capital of approximately EUR 150 million. This should allow us to guarantee around EUR 1 billion in loans for Ukrainian small and medium-sized enterprises," he said at the fourth Ukraine Resilience business forum held by the Luxembourg-Ukrainian Chamber of Commerce in Luxembourg last week.

He recalled that EIF’s role since 2016 has been to provide guarantees to Ukrainian financial institutions, thereby significantly reducing risk in their lending to Ukrainian small and medium-sized businesses.

"Currently we have guaranteed over EUR 700 million in loans to small and medium-sized businesses in Ukraine, around 3,000 companies. We have guarantee agreements with nine Ukrainian banks," Jansons specified.

According to him, these agreements are working very well, and EIF’s role is now simply expanding.

Jansons noted that EIF assumes around 80% of losses that Ukrainian financial institutions may incur in lending, but in return requires significant improvements in lending requirements, mainly achieved by reducing collateral requirements.

According to information on the EIF website, the fund is accepting applications until the end of March this year from new Ukrainian banks, leasing companies, and guarantee institutions to receive guarantees of up to 70% for providing loans (up to EUR 5 million) to SMEs in Ukraine for terms of up to 7-10 years.

EIF notes that in February 2024, within the Ukraine Investment Framework under the Ukraine Facility program, the European Commission agreed to allocate EUR 40 million to increase the EU4 Business Guarantee Facility and EUR 150 million in budget guarantees to support Ukrainian SMEs in response to economic challenges arising from Russia’s full-scale invasion, inflationary trends, and the energy crisis.