Estonian lender Bigbank AS has struck a landmark synthetic securitisation deal with the European Investment Bank (EIB) and the European Investment Fund (EIF) that will free up more than €250 million in new lending for small and medium-sized enterprises across Estonia, Latvia and Lithuania, the EIF confirmed. It is the first transaction of this kind for Bigbank, and puts a particular emphasis on micro-enterprises, young companies and environmentally sustainable investments.
The mechanics are straightforward in effect, if complex in structure: the EIF is providing Bigbank with a financial guarantee covering a reference portfolio of over €210 million in loans, credit lines and leases. By taking on a share of the credit risk, the guarantee reduces Bigbank’s regulatory capital requirements — and the capital freed up will be redeployed into approximately €253.6 million of additional lending to Baltic businesses over the next three years.
“It helps to finance small and medium-sized enterprises in all the Baltic countries with better pricing terms,” said Argo Kiltsmann, Bigbank’s CFO, calling the deal an important milestone for the bank. EIB Vice-President Karl Nehammer said the transaction shows how innovative financial tools can direct more money to the microenterprises that need it most, enabling “thousands of Baltic SMEs and mid-caps to invest, innovate and grow.”
EIF Chief Executive Marjut Falkstedt framed it in equally direct terms: “By sharing risk with the bank, our aim is to unlock fresh lending for businesses that form the backbone of local economies.” The deal is as much about economic resilience as it is about finance — channelling capital toward the smaller players that rarely make headlines but keep regional economies running.
For the Baltics, where access to affordable business financing has long been a constraint on growth, the agreement offers a meaningful boost at a time when many small firms are still navigating a tough economic environment.
