EIF Expands Microfinance Support with €100 Million Facility for Froda to Boost SME Growth Across Europe

EIF Expands Microfinance Support with €100 Million Facility for Froda to Boost SME Growth Across Europe

(IN BRIEF) The European Investment Fund (EIF) has approved a €100 million guarantee facility for Froda, increasing their lending capacity to support micro-entrepreneurs across the EU. This expands on an existing €50 million arrangement, bringing the total to €150 million. The initiative, backed by the InvestEU programme, aims to bridge Europe’s microfinance gap, providing underserved businesses, including female entrepreneurs and sole traders, with access to crucial capital. Froda will leverage EIF’s guarantees and its digital lending platform to reach more micro-SMEs, driving growth and economic impact. This partnership marks a key step toward creating a sustainable financing ecosystem for small businesses in Europe.

(PRESS RELEASE) LUXEMBOURG, 5-Feb-2025 — /EuropaWire/ — The European Investment Fund (EIF) has granted a new €100 million guarantee facility to Froda, a leader in micro-SME financing, expanding the lender’s ability to provide critical capital to micro-entrepreneurs across the EU. This new facility, which builds upon an existing €50 million arrangement, brings the total funding available for micro-entrepreneurs to €150 million. The initiative is supported by the InvestEU programme and marks the first-ever EU-wide microfinance guarantee.

Through this partnership, Froda will be able to further extend its digital lending platform to reach underserved micro-enterprises, including those run by female entrepreneurs and sole traders. By leveraging EIF’s specialized guarantees, Froda aims to address financing gaps within Europe’s smallest businesses, driving economic growth through inclusive entrepreneurship. The collaboration is expected to bring measurable impact to micro-SMEs, unlocking opportunities for growth in traditionally underserved sectors.

Marjut Falkstedt, CEO of EIF, commented on the success of the partnership, noting, “The InvestEU programme is designed to provide scalable solutions to microfinancing, and we have seen how targeted guarantees in Sweden have allowed Froda to drive growth for micro-enterprises. This expanded partnership will help build a more robust and sustainable financing ecosystem across Europe, reinforcing the foundation of Europe’s entrepreneurial spirit.”

With this new funding, Froda plans to significantly boost its digital lending infrastructure, enabling access to capital for thousands of micro-entrepreneurs, particularly in the Nordics. The platform, integrated with partners like Visa, offers an efficient and scalable financing model, ensuring smooth access to funds for the smallest businesses. Businesses financed through Froda have already experienced an average growth rate of 131% in their performance within the first year, demonstrating the effectiveness of the model.

Olle Lundin, CEO and co-founder of Froda, added, “This extension of support from EIF is a crucial milestone in our mission to provide growth opportunities to SMEs throughout Europe. By empowering our Embedded partners to enter new markets, this collaboration has the potential to revolutionize SME financing across borders.”

This new guarantee facility is a landmark development for microfinance in Europe, enhancing access to finance for small businesses and helping foster sustainable economic growth across the continent.

Background information

About EIF

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 enterprises (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of sustainability, innovation, research and development, entrepreneurship, growth and employment.

About Froda

Founded in 2015, Froda set out to redefine business financing by making it accessible, efficient, and empowering for small and medium-sized enterprises. Through digital processes and technological innovation, Froda has shortened the loan process from months to minutes, making it easy for entrepreneurs to invest in their ideas and grow with ease. Today, Froda is one of Europe’s fastest-growing fintech scaleups, valued at 1.7 billion SEK. With a strategic focus on embedded financing, Froda has expanded across the Nordics, the UK, Ireland and Germany, partnering with industry leaders like Visa, Checkout.com, Lunar. Froda is a licensed credit market company under the supervision of the Swedish Financial Supervisory Authority. For more information, visit froda.se

Media Contacts:

EIF: Serena Sertore | s.sertore@eib.org | tel.: +352 437 970 859

Website: wwww.eif.org/ | Press Office: +352 4379 21000 — press@eib.org

Froda: Ellen Freij | ellen.freij@froda.se | +46 76 214 61 47
Website: www.froda.se/en | press@froda.se

SOURCE: European Investment Fund