Froda is strengthening its cooperation with the European Investment Fund (EIF) by securing additional lending capacity of SEK 1.14 billion. This builds on an existing guarantee of SEK 560 million. Froda thus becomes the first partner to secure an EU-wide microfinance agreement with the EIF, opening up better opportunities for small businesses across Europe.
The financing gap for small businesses in Europe is estimated at €400 billion, and many small businesses struggle to access the finance they need to grow and compete. To address this, the EIF is working on various guarantee programs to expand financing opportunities for SMEs. Since 2022, Froda has been working with the EIF to improve access to finance for micro-enterprises, companies with fewer than ten employees in Sweden. Froda has already demonstrated how the financing model works in practice, with Froda's customers increasing their growth by an average of 131% in the first year after receiving financing.
With SEK 1.7 billion in loan guarantees, Froda aims to replicate the success of Sweden on a larger scale to 10,000 small entrepreneurs across Europe. The goal is to drive economic growth and innovation, and reduce the financing gap for microenterprises with limited access to fair financing. This agreement strengthens Froda's ability to reach out across Europe and create a more connected and supportive financial ecosystem for small businesses.
- The increased support from the EIF is an important step in our ambition to grow and create opportunities for small businesses across Europe. We can now follow our Embedded partners into new markets and help more small businesses. Our goal is to find solutions that enable international expansion for both us and our partners," says Olle Lundin, CEO and co-founder of Froda.
Froda and the EIF share the idea of creating a well-functioning market and better access to finance for small businesses across Europe. The new agreement opens up for international expansion, where Froda's Embedded partners can offer their customers loans with EIF guarantees. As the first player with guarantee coverage in all EU countries, the agreement is unique.
- The goal of the InvestEU program is to create working solutions for microfinance. We have seen how the guarantees have enabled Froda to make financing more accessible to microenterprises in Sweden. It is therefore natural that we increase the scope of the cooperation to include the entire EU. I am convinced that together we can create a sustainable and effective solution for financing in Europe," says Marjut Falkstedt, Director General of the EIF.
Since 2021, Froda has focused on developing embedded finance solutions that have been the foundation of its international expansion. Through collaborations with banks, payment providers and fintech companies, Froda is able to offer a white-label SME lending service that integrates seamlessly with its partners' platform and enables them to offer business loans directly to their customers. The increased support from the EIF is expected to strengthen Froda's role as a leading European player in financing for SMEs.
About Froda
Froda was founded in 2015 with the ambition to redefine business finance by making it more accessible and efficient for SMEs. Froda creates opportunities for all entrepreneurs, regardless of background, to realize their business ideas. Using digital processes and technological innovation, Froda has revolutionized the loan process, shortening it from months to minutes - with a focus on providing fast, fair and inclusive financing. Today, Froda is one of Europe's fastest growing tech companies, backed by investors such as Karl-Johan Persson, Nicklas Storåkers and Victor Jacobsson. In 2021, Froda launched an embedded finance initiative, through which the company has expanded to the Nordic region, the UK and Germany and entered into partnerships with Visa, Lunar and Checkout.com, among others. As a credit market company, Froda is under the supervision of the Swedish Financial Supervisory Authority. Read more about Froda
About the European Investment Fund (EIF)
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its main mission is to support Europe's micro, small and medium-sized enterprises (SMEs) by helping them access finance. The EIF designs and develops venture capital, growth capital, guarantees and microfinance specifically targeted at this market segment. In this role, the EIF promotes the EU's objectives of sustainability, innovation, research and development, entrepreneurship, growth and jobs.
Posted
February 5, 2025
