Financial Cooperation Between EU and Western Balkans

EU guarantees will unlock 750 million euros for SMEs in the Western Balkans

Marjut Falkstedt

The European Investment Fund (EIF) has signed agreements with 11 banks and financial companies in the Western Balkan countries to provide loan guarantees to small and medium-sized enterprises. The signing took place within the framework of the European Union’s Western Balkans Enterprise Development & Innovation Facility (WB EDIF) under the title “SME Sustainability Guarantee.” The deal will allow local banks and financial institutions to build a portfolio of SME loans for an amount exceeding 750 million euros. In Serbia alone, this instrument should provide loans worth 250 million euros. Another set of agreements is scheduled to be approved later, by the end of the first half of 2024.

The European Investment Fund, part of the European Investment Bank (EIB), is a European institution with the main objective of supporting the creation, growth, and development of small and medium-sized enterprises. It was established in 1993 on the basis of a proposal made at the European Council session in Edinburgh in December 1992.

According to EIF Executive Director Marjut Falkstedt, “by supporting small businesses in the Western Balkans, especially in the most vulnerable and still poorly supported sectors, with these huge financial resources, we hope to be able to improve the ability of these business companies to grow through innovation, while facilitating further integration into the EU economy.” Brussels expects these funds to boost local economies. They will become more sustainable and competitive as a result of their subsequent integration into global supply chains.

Since 2013, the European Investment Fund, in cooperation with the European Commission, has allocated a total of €3.5 billion to support more than 67,000 businesses. This has created 900,000 jobs in the Western Balkans.