EU guaranteeing $113m to support $490m in lending by EBRD to MSMEs in Eastern Europe, North Africa, Western Asia

In partnership with the multilateral European Bank for Reconstruction and Development (EBRD), the EU agreed to guarantee up to EUR 115 million (USD 113 million) in loans distributed by retail financial services providers (FSPs) to micro-, small and medium-sized enterprises (MSMEs) in selected countries of the Caucasus, Eastern Europe, and the southern and eastern Mediterranean. The lending, which targets women-led, youth-led and rural businesses, is to be funded by EUR 500 million (USD 490 million) from EBRD along with additional private funds that have yet to be raised, according to Microcapital.org.

An additional set of guarantees by the EU – in an amount totaling EUR 35 million (USD 34 million) – will support investment in high-speed internet services. All of the guarantees will be managed by the EU’s European Fund for Sustainable Development Plus (EFSD+) Guarantee Programme.

Founded in 1991 and based in the UK, EBRD seeks to support a “transition to open, market economies, whilst fostering sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in funders of MSMEs. The institution disbursed approximately EUR 10.4 billion (USD 11.1 billion) to 413 projects during 2021. EBRD’s shareholders comprise 71 countries in addition to the EU and the European Investment Bank.

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