Unlocking Finance for Social Enterprises in Hungary

Backed by the Social Investment and Skills window of the InvestEU program, the European Investment Fund (EIF) has signed a guarantee agreement for EUR 53 million with Erste Group that is expected to unlock more than EUR 66 million for social entrepreneurs operating in Austria, the Czech Republic, Hungary, Romania and Slovakia. The transaction should benefit more than 500 social enterprises, which often have trouble obtaining credit, and create around 1,750 jobs.

The agreement will allow Erste Group to offer better financing conditions for social enterprises. These firms will also benefit from specialized capacity building and networking opportunities. All these initiatives aim to empower social enterprises and strengthen their impact.

Thanks to its social banking program, Erste Group has established itself as a leader in financing social enterprises in Central and Eastern European (CEE) countries. More than 1 000 social enterprises have obtained loans through the program, preserving or creating 16 242 jobs between 2016 and 2021. Erste Group also participated in the EU Employment and Social Innovation (EaSI) program, a financing instrument promoting high quality and sustainable employment that ran from 2014 to 2021.

The new agreement under InvestEU will enable Erste Group to build on this success. Thanks to the participation of four Austrian savings banks in the guarantee program, Erste Group will be able to promote social enterprise support in east Austria for firms not caught by the previous umbrella transaction under the EaSI program. The transaction is also expected to have a strong positive impact on the social economy in the CEE region, which is not yet equally developed and stands to benefit greatly from a targeted instrument. To this end, Erste Group can count on the participation of all its subsidiary banks in the region.