Froda expands EIF partnership to boost SME microfinancing in the EU

This increase builds on an existing EUR 50 million guarantee, raising the total to EUR 150 million and widening Froda’s financing scope to all 27 EU member states. The agreement makes Froda the first company to establish an EU-wide microfinance partnership with the EIF, aiming to improve access to funding for small businesses across Europe. 

According to the official press release, Europe faces an estimated SME financing gap of EUR 400 billion, with many small businesses struggling to obtain necessary funding. The EIF uses guarantee programmes to support financing opportunities for these enterprises.  

Since 2022, Froda has worked with the EIF to support micro-enterprises, which are businesses with fewer than ten employees, in Sweden. The company reports that businesses using its financing services have seen notable growth within a year of receiving funding. 

With the expanded EUR 150 million guarantee, Froda plans to extend its SME financing model across Europe, targeting 10,000 businesses. The initiative aims to support economic growth and innovation while addressing barriers to fair financing for micro-enterprises. 

Representatives from Froda stated that the increased EIF support would help small businesses expand across European markets. They emphasised that the partnership facilitates a financing structure that encourages cross-border growth for both Froda and its affiliated partners. Under the new agreement, Froda’s Embedded Financing partners will be able to offer EIF-backed loans across the EU. The initiative aligns with the EIF’s mission to promote microfinance and entrepreneurship while supporting the EU’s goals of digitalisation and financial inclusivity. EIF officials highlighted the success of targeted guarantees in Sweden and expressed confidence that extending the model across the EU would create a sustainable financing infrastructure for small businesses.

More information about Froda 

Since 2021, Froda has focused on Embedded Finance solutions as a core component of its international expansion. By integrating with banks, payment providers, and fintech companies, Froda enables its partners to offer business loans directly through their platforms. In 2024, Froda partnered with Juni to scale Embedded Finance solutions, and with Visa to optimise the lending processes for SMEs across the regions of Europe.  

The expanded EIF guarantee aims to support Froda’s ability to scale its lending services and enhances its position in the European microfinancing sector.