Froda Secures €150M EIF-Backed Guarantee to Boost SME Financing Across Europe
Froda, a leading FinTech company specializing in SME financing, has made significant strides by enhancing its partnership with the European Investment Fund (EIF). This collaboration has resulted in an impressive increase of €100 million in lending capacity, amplifying the total financing support to €150 million. This groundbreaking agreement positions Froda as the first entity to establish an EU-wide microfinance partnership with the EIF, significantly improving credit access for small and medium-sized enterprises across all 27 EU member states.
The SME Financing Challenge in Europe
The financing gap for SMEs in Europe is estimated at a staggering €400 billion, leaving countless small businesses struggling to secure the capital necessary for growth and competitiveness. To tackle this challenge, the EIF utilizes guarantee programs to broaden financing avenues for SMEs.
Partnership History and Impact
Froda has been collaborating with the EIF since 2022, focusing on providing financing solutions to micro-enterprises—businesses with fewer than ten employees—in Sweden. Remarkably, companies that have received funding from Froda have experienced an average growth of 131% within just one year of receiving support.
Future Goals and Economic Impact
With the expanded lending guarantees totaling €150 million, Froda aims to replicate its successful model on a much larger scale, targeting to support approximately 10,000 SMEs across Europe. The extended partnership is anticipated to foster economic growth and innovation, enhancing financial access for micro-enterprises that often face challenges in obtaining fair financing.
Statements from Leadership
Olle Lundin, CEO and co-founder of Froda, commented, “The extended support from EIF represents a pivotal step in our mission to unlock growth opportunities for SMEs throughout Europe. By enabling our Embedded partners to expand into new markets, this partnership is set to transform the landscape of SME financing. Our vision is to create a financing ecosystem that fosters cross-border expansion for both Froda and our partners.”
The agreement also opens new avenues for Froda’s Embedded partners, empowering them to provide EIF-backed loans throughout the EU. This collaboration aligns with the EIF’s objectives of promoting microfinance, entrepreneurship, and inclusive growth, resonating with the EU’s broader goals of digitalization and equitable financing access.
Statements from EIF Leadership
Marjut Falkstedt, CEO of EIF, stated, “The InvestEU program is designed to deliver scalable, impactful solutions for microfinancing. We’ve seen how EIF’s targeted guarantees in Sweden have empowered Froda to facilitate growth for micro-enterprises. I am confident that our enhanced partnership will establish a robust, sustainable financing infrastructure that supports Europe’s entrepreneurial backbone.”
Froda’s Continued Evolution
Since its inception in 2015, Froda has concentrated on developing embedded finance solutions as part of its international expansion strategy. Collaborating with banks, payment providers, and FinTech firms, Froda offers white-label SME lending services integrated into partner platforms, ensuring seamless access to financing for businesses.
With a growing presence across the Nordics, the UK, Ireland, and Germany, Froda has formed partnerships with industry leaders such as Visa, Checkout.com, and Lunar.
For more information on SME financing solutions, visit our SME Financing page.
