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SMEs now have access to 6.5 billion euros in affordable credit

The Ministry of Economy and Territorial Cohesion announced today that the “InvestEU Fomento-FEI” program aims to finance projects developed by over 40,000 SMEs, small to mid-cap companies, and individuals, projecting to “mobilize more than 6.5 billion euros in investment.”

The funding lines are intended for companies investing in innovation, digitalization, sustainability, competitiveness, and agriculture.

Companies can approach Portuguese commercial banks to seek credit under this program, with lower interest rates and more favorable financial conditions, based on guarantees provided by the FEI within the framework of this European program.

This new development program was included by the Portuguese Government “in the latest revision of the Recovery and Resilience Plan (Investment RE-C05-i16 InvestEU: Member States’ Component in InvestEU),” which the executive submitted on February 1 of this year and was approved by the Council of the European Union on May 13, as the ministry explains in the same statement.

The Ministry of Economy stated that “the FEI guarantee will enable partner banks to offer more advantageous financing conditions, including lower interest rates, reduced collateral requirements, and reduced initial investments for loans,” in addition to being able to “offer longer repayment terms, higher financing amounts, and support segments traditionally excluded, such as startups.”

The “InvestEU Fomento-FEI” is “supported by 450 million euros from the Recovery and Resilience Plan (PRR), 50 million euros of public guarantee from the State Budget, and 490 million euros of FEI resources,” the ministry states.

The projection of the 6.5 billion euros to be mobilized was made public on the day Prime Minister Luís Montenegro attended an event in Santa Maria da Feira organized by the Banco Português de Fomento (BPF), where he referred to this “partnership between Portugal and the European Commission, in the scope of ‘InvestEU Fomento-FEI'” as a “fundamental pillar” for “promoting investment oriented towards growth.”

For Portuguese commercial banks to proceed with these credit lines, they will now have to apply.

According to the Ministry of Economy, the FEI has issued a call to “select the Portuguese banks that will operationalize the guaranteed loans under the program, with the expectation that the first operations will be signed before the end of 2025.”

If the 6.5 billion euros are fully mobilized, it will represent “the largest volume mobilized by a Member State’s component in the InvestEU program across Europe,” the ministry also mentions.

Marjut Falkstedt, CEO of the FEI, is quoted in the statement as saying she believes the project will allow the mobilization of significant financial support for tens of thousands of Portuguese companies, promoting competitiveness, sustainability, and innovation.”

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