EIB and MONETA sign €70m loan to support Czech's SMEs and mid-cap companies

The EIB loan aims to address the investment and liquidity constraints faced by small businesses and therefore contributes to the mitigation of the negative economic impact of the COVID-19 pandemic.

The European Investment Bank (EIB) signed a €70 million loan (equivalent to CZK 1.8 billion) with MONETA, one of the largest retail and small business banks in the Czech Republic, to support SMEs and mid-cap companies. MONETA's primary focus is consumer finance and SME lending, particularly in the agriculture sector.

The EIB loan aims to address the investment and liquidity constraints faced by small businesses and therefore contributes to the mitigation of the negative economic impact of the COVID-19 pandemic.

EIB Vice-President Lilyana Pavlova said: "Small businesses generate more than half of the total economic value added and two-thirds of the jobs in the Czech Republic. Supporting the continued development of SMEs and mid-caps during the COVID-19 crisis is, therefore, crucial to maintain employment and support the resilience of the Czech economy. Our loan to MONETA aims to address the financing needs of these essential economic actors and to create the necessary conditions for the future growth post-pandemic of the country. The cooperation between the EU Bank and MONETA will contribute to regional development, helping reduce regional disparities and towards increasing competitiveness and productivity of SMEs."

Tomáš Spurný, MONETA chairman of the Board of Directors, said: "Our cooperation with EIB further enhances MONETA´s commitment to supporting small businesses. These form the backbone of the Czech economy. We stand ready to continue in our aspiration to be the solid champion of this very important part of our economic landscape in these difficult times."

SMEs and smaller mid-cap companies are highly exposed to the negative impact of the COVID-19 pandemic. Compared to large corporates, smaller companies usually have thinner liquidity reserves, less financing alternatives and assets that can be quickly divested as a source of additional capital. The impact of the pandemic across Europe, the Czech Republic included, is associated with a tangible investment drop and increased liquidity needs.