- EIF investment is made possible under European Fund for Strategic Investments (EFSI), main pillar of the Investment Plan for Europe.
- Vauraus expects to support at least 150 Finnish SMEs when the fund reaches its full size, and will expand its lending activities to medium-sized companies as well.
Vauraus becomes the first Finnish crowdlending platform to be supported by the EIF under EFSI Private Credit Tailored for SME programme, with a cornerstone investment in Vauraus’ new SME Loan Fund I Ky. The EIF-participation in the fund, made possible by backing from the Investment Plan for Europe of the European Commission, is expected to attract further, private, investment to the fund, helping it to reach a target size of at least € 60 million.
At final close, Vauraus will be able to support at least 150 Finnish SMEs with loans from its SME Loan Fund, thus making available much needed financing in a time when, due to the Covid-19 pandemic, access to finance is particularly difficult. Specifically, Vauraus targets small enterprises that are currently not served by microfinance providers and underserved by banks, given small ticket sizes, or lack of collateral.
Vauraus’ new SME Loan Fund I Ky will offer Finnish small and medium-sized businesses market-based and tailor-made funding solutions, speedy deployment and flexible approach. It will also help to strengthen the alternative private credit market in Finland, which is still lagging behind compared to some other EU economies.
Thanks to the backing of the EIF and additional funds available for investment via the Fund, Vauraus will also be able to scale up its activities by awarding also slightly larger loans, compared to current average financing size. Vauraus’ close contact with the market, mainly thanks to its network of agents with good regional knowledge and access to local SMEs, will make sure that SMEs all over Finland can be properly served.
Executive Vice-President for an Economy that Works for People, Valdis Dombrovskis, said: “I am glad that with support from the Investment Plan for Europe, Finnish crowdlending platform Vauraus will be able to extend its lending activities to even more Finnish SMEs which operate in a difficult fundraising environment given the ongoing crisis. We need to help SMEs, and regional lenders with their knowledge of specific financing needs are key in this process.”
“This is a historical milestone for Vauraus and states the quality of the efforts made by the whole team for several years. EIF, together with the fund’s other institutional investors creates a major impact on the market by making the large volumes available for finnish SMEs. This will create growth, employment and increase the activity in the businesses. As Vauraus serves the businesses nationwide, it will profit all the geographical areas.” states Elisa Saarinen, CEO of Vauraus Suomi Oyj.
“The EIF has been a key partner in financing SMEs for quite some years now,” stated Alain Godard, Chief Executive of the EIF. “In the ongoing situation, we reaffirm our commitment to these businesses and our financial intermediaries by making sure they can count on our support to weather the crisis.”
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.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first loss guarantees enabling the EIB Group to invest in riskier projects. The projects and agreements approved for financing under EFSI have so far mobilised €535.4 billion in investment, benefitting over 1.4 million SMEs.
Vauraus AIFM Oy (the fund manager) is a fully owned subsidiary of Vauraus Suomi Oyj, a Finnish marketplace lender specialised in SMEs. Vauraus is a Finnish public limited liability company set-up in 2011 as a crowdlending platform focused on Finnish SMEs. So far, it has intermediated a total of EUR 193m in financing between c. 1,000 borrowers and c. 6,000 investors. Since 2016, the Platform issued c. EUR 150m loans.
