Estonia's Coop Pank and the European Investment Fund (EIF) signed an agreement on Thursday that will allow the bank to provide an additional €16 million in corporate loans to small and medium sized enterprises (SMEs) active in Estonia.
"The aim of the unsecured loan agreement concluded with the EIF is to support companies active in Estonia and help them achieve growth and their development goals," Hans Pajoma, board member and chief of corporate banking at Coop Pank, said in a press release.
Under the agreement, the EIF will give Coop Bank €8 million for ten years, which the bank must match themselves, thus providing the Estonian bank with an additional financing facility of €16 million.
"With the support from the EIF, we can finance businesses that meet valid EU criteria for SMEs, which means that their number of employees must be smaller than 500," Pajoma explained. "The size of the loan must be between €25,000-500,000 per customer, and the length of the agreement up to ten years."
EIF CEO Pier Luigi Gilibert said that the EIF is pleased to sign thee agreement with the new financial intermediary, Coop Pank, and thereby support Estonian SMEs.
The agreement was signed at the SME Assembly, the EU's annual top SME policy development event which is currently taking place in Tallinn.
Coop Pank's net profit in the first nine months of 2017 totaled €4.4 million, including an extraordinary profit of €3.2 million from the sale of real estate. The bank's loan portfolio increased 40 percent compared to the beginning of the year, totaling €215 million; its deposits portfolio, meanwhile, increased 22 percent in the first nine months of the year, totaling €309 million.
The number of Coop Pank customers increased by 1,300 during the first nine months of the year. The bank, along with its subsidiaries, employs approximately 200 people at its headquarters and in 14 offices located across Estonia.
Coop Pank was established based on the former AS Eesti Krediidipank. The bank began operating under the Coop Pank name in October. Its majority shareholder is Coop Eesti, a group consisting of 19 regional consumers' cooperatives that handles the retail sale of food and consumer goods; it includes 350 stores and has approximately 600,000 regular customers.
Editor: Aili Vahtla