Latvia’s European Union Commissioner, Valdis Dombrovskis, on February 20 announced a new initiative aimed at stimulating small business financing in the Baltic States.
Non-bank business lender Noviti Finance, and the European Investment Fund (EIF), have signed a cooperation agreement to give micro businesses and farmers better access to funding of up to €25,000. The guarantee is funded by the Employment and Social Innovation (EaSI) programme of the European Union and is backed by the Investment Plan for Europe.
Noviti Finance, a non-bank lender based in Lithuania, will use the guarantee instrument to support micro companies in Latvia, Lithuania and Estonia. The Investment Plan for Europe allows the European Investment Bank Group to invest in higher-risk operations, while EaSI aims to improve access to finance for vulnerable groups, micro-enterprises and social enterprises.
Announcing the initiative European Commission Executive Vice-President Dombrovskis said: “Promoting an economy that works for the people means encouraging the ambitions and entrepreneurial talents our citizens. Today’s agreement is an excellent step in that direction. The European Investment Fund’s €10 million agreement under the Investment Plan for Europe with Noviti Finance means that small businesses with up to 9 employees can benefit from loans of up to €25,000. This financial boost gives micro-enterprises in Latvia, Lithuania and Estonia a real opportunity to thrive and expand.”
Noviti Finance will be able to issue up to €10 million in microcredits to small companies in the Baltic States. Loans under this agreement will be available to companies with a maximum of 9 employees. The annual turnover of the company should not exceed €2 million. A large proportion of Baltic companies meet the EIF criteria for receiving business support.
Noviti Finance is an alternative lender for small and medium-sized companies that has operated in Lithuania for four years. The company has funded over 1,000 companies from the country since its establishment in 2016. This month the company is launching its activities in Latvia.