The European Investment Fund (EIF) has signed a microfinance guarantee agreement with ALTUM, Latvia’s state-owned development institution. The agreement, which offers micro-entrepreneurs loans at a reduced interest rate with lower collateral requirements, is part of the EU Programme for Employment and Social Innovation (EaSI) and forms a core module of the European Fund for Strategic Investments (EFSI).
This new EaSI guarantee agreement – worth 15 million euros – will allow ALTUM to provide loans to 600 micro-entrepreneurs over the next three years across Latvia. ALTUM will primarily target start-ups and small businesses.
European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said: “With the help of EU funding, ALTUM will improve access to finance for hundreds of micro-enterprises in Latvia, many of whom face difficulties in accessing credit from traditional banking sources. This shows once again that the European Commission, through the EaSI programme, is fully committed to boosting employment in Europe and getting more people into jobs.”
“I am pleased that this agreement will help ALTUM to launch a new micro lending product addressing the financing needs of micro-enterprises in both start-up and development phases. Supporting borrowers who are at risk of social exclusion and face difficulties in accessing the credit market helps to drive forward an inclusive entrepreneurship culture,” said Pier Luigi Gilibert, the EIF’s CEO.
“The main beneficiaries of this programme will be recently established companies and those with miniscule turnover – they can access funding up to 25,000 euros with just a personal guarantee and no collateral,” said Reinis Bērziņš, CEO of ALTUM. “We are excited about this EaSI agreement because it will grant companies access to funding under favourable conditions, promoting sustainable economic growth.”
The EaSI guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the EIF.