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Europe supports SMEs and small mid-caps in Faroe Islands and Greenland

  •  
    Date: 13 June 2019
  • BankNordik to issue up to DKK 300 million (EUR 40 million) of new lending to local businesses under the InnovFin SME Guarantee facility with European Investment Fund.

BankNordik P/F has entered into an agreement with the European Investment Fund (EIF) under the “InnovFin SME Guarantee Facility”. The guarantee agreement will allow BankNordik to issue up to DKK 300 million of new loans under more favourable conditions to local SMEs and small mid-caps. The financing agreement is backed an InnovFin guarantee, which will allow the EIF to cover up to 50% of losses incurred in by BankNordik’s new lending, thus giving the bank an incentive to provide debt financing on more favourable terms. The guarantee also translates into a better financing rate for the borrower.

The CEO of BankNordik, Árni Ellefsen, commented: “We are delighted to be collaborating with the EIF to bring the support of the InnovFin SME Guarantee facility to SMEs in the Faroe Islands and Greenland. The InnovFin guarantee will improve access to finance for healthy, innovative SMEs at BankNordik while allowing the bank to maintain its sensible credit approach. We are convinced that the collaboration will provide a real benefit to both economies and help lay the foundation for continued growth in the coming years.

European Commission Vice-President Jyrki Katainen said: "Companies that are small, new, highly innovative – or indeed all three – often face difficulties in securing finance from banks. This is certainly the case in the Arctic region, where the vast majority of companies are logically smaller given the size of the overall economy. It can be particularly challenging to obtain loans in rural parts of Greenland. This is where the InnovFin programme is playing a vital role. Thanks to this new agreement between the European Investment Fund and BankNordik, businesses in the Faroe Islands and Greenland will see a marked improvement in their ability to access credit, with up to 300 million Danish krone now available for new loans."

EIF Chief Executive, Pier Luigi Gilibert, added: “This signature shows that Europe is there for everyone, whether in the heart of the continent or on the periphery. The Faroe Islands and Greenland experience the same issues with access to finance as mainland SMEs and small mid-caps, the EIF is glad it can lend a hand in improving this situation across all of Europe.”

Background information

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

BankNordik is a banking and insurance group. Incorporated in the Faroe Islands and listed on Nasdaq Copenhagen, it has banking activities across the Faroe Islands, Greenland and Denmark. As a trusted financial partner with a history of more than 100 years, BankNordik’s hallmark has always been its close relationship with its customers and its strong local commitment.

The InnovFin SME Guarantee Facility - managed by the EIF – is an initiative launched by the European Commission and the EIB Group in order to improve European small and medium-sized enterprises (SME) access to finance. The InnovFin SME Guarantee Facility is deployed by eligible local banks, leasing companies, guarantee institutions (“financial intermediaries”), etc. which are selected after a due diligence process. The EIF, acting as the implementing body, covers a portion of the losses incurred by the financial intermediaries on loans, leases and guarantees between EUR 25 000 and EUR 7.5 million, which they provide under the InnovFin SME Guarantee Facility.

Press contacts:

EIF:
Tim Smi
+352 691 286423
t.smit@eib.org

Bank Nordik:
Rúna Rasmussen
+298 230 478
rr@banknordik.fo

European Commission:
Siobhán Millbright
+32 460 75 73 61
siobhan.millbright@ec.europa.eu

 

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