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EBRD and BISF promote growth of micro and small businesses in Estonia
A €10 million credit line from the European Bank for Reconstruction and Development (EBRD) to Hansapank will boost Estonia’s micro and small enterprises (MSEs). The line is the first extended under a framework, co-funded by the Baltic Investment Special Fund (BISF), set up to provide senior loans to Estonian banks. In this case, the BISF is providing €5 million of the credit line.
"With this loan the EBRD is striving to expand the availability of term finance for micro and small borrowers in Estonia," said Kurt Geiger, Director of the EBRD’s Financial Institutions team. "Hansapank has been lending to this sector, but the new facility brings together technical advisors and financing support from the EBRD and the BISF to reach the sector more effectively. Moreover, Hansapank has agreed to use these funds to a large extent to target MSEs outside the capital, Tallinn."
He continued: "For the EBRD, Hansapank is a long-standing and successful partner. Hansapank has used previous EBRD credit lines to target medium-sized firms and housing, for example. This loan, in contrast, targets specifically the very small end of the small and medium-sized enterprises sector, where Hansapank has expressed a strong commitment to focus its operations."
With a five-year maturity, the €10 million credit line will allow Hansapank to incorporate lending to MSEs into its ongoing business. At the same time, the Baltic Technical Assistance Special Fund will provide technical cooperation to further enhance Hansapank’s MSE lending policies and procedures.
Hansapank is the largest financial institution in the Baltic states, comprising business units in Estonia, Latvia and Lithuania, leasing and factoring company Hansa Capital, Hansapank Markets (which is developing into an investment bank), Hansa Aktivate Juhtimise AS and Hansapanga Kindlustus (which provides life insurance). From the creation of the first units of the group in 1992, the Hansabank Group has grown to a financial enterprise with EEK 34.65 billion (€2.2 billion) in assets.
Administered by the EBRD, the BISF is one of the two Special Funds established at the Bank under the Baltic Investment Programme financed by the Nordic countries. The Fund promotes private sector development through the provision of financial support for small and medium-sized enterprises in Estonia, Latvia and Lithuania.
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