MIGA has issued a guarantee of €47.5 million to UniCredit Bank Austria AG covering its €50 million shareholder loan funded by the Council of Europe Bank (CEB) to SIA “UniCredit Leasing” (UCLL) in Latvia, a member of the UniCredit Group (UCG). The coverage is for a period of up to five years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The Latvian leasing market is currently feeling the effects of the financial crisis. Access to affordable finance for small and medium enterprises (SMEs) has worsened and many local leasing companies have lost access to funding sources. The purpose the investment is to enable UCLL to extend leases to SMEs.
This project is expected to contribute to the development of the financial sector in Latvia by improving access to finance, particularly to segments of the economy that are currently underserved. The project will meet the increasing demand for leasing as a form of asset financing.
EIB and CEB are providing attractive long-term funding to UCLL in the context of the Joint IFI Action Plan designed to support the financial sector and lending to real economy in Europe and Central Asia at a time when credit conditions continue to make it difficult for SMEs to raise financing. MIGA’s support for this project is consistent with this objective.
