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Froda, a leading provider in SME financing, has strengthened its partnership with the European Investment Fund (EIF), by securing an additional lending capacity of €100 million. This builds on an existing €50 million guarantee, bringing the total to €150 million and extending Froda’s financing reach across all 27 EU member states. The agreement marks Froda as the first company to establish an EU-wide microfinance partnership with the EIF, providing critical financing support to SMEs across Europe.

The SME financing gap in Europe is estimated at €400 billion, with many small businesses struggling to access the financing needed to grow and compete. To address this, EIF leverages various guarantee programs to expand financing options for SMEs. Since 2022, Froda has partnered with the EIF to improve access to financing for micro-enterprises, businesses with fewer than ten employees, in Sweden. Froda has already demonstrated the effectiveness of its financing model, where SMEs financed through Froda experienced an average growth of 131% within their first year after receiving financing.

With €150 million in lending guarantees, Froda aims to replicate the efforts in Sweden on a wider scale to 10,000 SMEs across Europe, driving economic growth and innovation, while addressing the financing gap for microenterprises with limited access to fair financing. This agreement positions Froda to extend its reach across Europe, empowering SMEs to thrive in a more interconnected and supportive financial ecosystem.

"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," says Olle Lundin, CEO and co-founder of Froda.

Froda and EIF share a vision of building a robust financing ecosystem for small businesses across Europe. The new agreement expands opportunities for Froda Embedded partners, enabling them to provide EIF-backed loans across the EU. By scaling innovative financial solutions, the partnership supports EIF's mission to promote microfinance, entrepreneurship, and inclusive growth, while advancing the EU’s goals of digitalization and equitable access to financing. As the first company to secure a microfinance guarantee covering all member states, Froda is addressing the SME financing gap, empowering underserved microbusinesses and strengthening Europe’s financial ecosystem.

"The InvestEU program is built to provide scalable, impactful solutions for microfinancing. We’ve witnessed how EIF’s targeted guarantees in Sweden have enabled Froda to unlock growth for micro-enterprises. Expanding this model across the EU, I am confident that our strengthened partnership will build a robust, sustainable financing infrastructure that supports Europe’s entrepreneurial backbone," says Marjut Falkstedt, CEO of EIF.

Since 2021, Froda has focused on developing embedded finance solutions as the cornerstone of its international expansion. By partnering with banks, payment providers and fintechs, Froda offers white-label SME lending services that integrate seamlessly into partners’ platforms, enabling them to offer

business loans directly to their clients. The extended support from the EIF not only amplifies Froda’s capacity to scale its lending capabilities, but also solidifies its role as a leading European player in microfinancing.

About Froda
Founded in 2015, Froda set out to redefine business financing by making it accessible, efficient, and empowering for small and medium-sized enterprises. Through digital processes and technological innovation, Froda has shortened the loan process from months to minutes, making it easy for entrepreneurs to invest in their ideas and grow with ease. Today, Froda is one of Europe’s fastest-growing fintech scaleups. With a strategic focus on embedded financing, Froda has expanded across the Nordics, the UK, Ireland and Germany, partnering with industry leaders like Visa, Checkout.com, Lunar. Froda is a licensed credit market company under the supervision of the Swedish Financial Supervisory Authority. For more information, visit Froda.

About EIF
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized enterprises (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of sustainability, innovation, research and development, entrepreneurship, growth and employment.

Froda and Juni are two of Sweden's leading fintech companies. The two companies are now joining forces, entering into a partnership as Juni joins Froda Embedded. The partnership represents a long-term investment in embedded finance that begins with Juni integrating Froda's technical platform and utilizing Froda's capital pool.

Both companies share the vision of helping as many entrepreneurs as possible gain access to financing on favorable terms. Europe alone has more than 25 million SMEs, but access to financing remains one of the biggest obstacles for smaller businesses looking to grow. The partnership aims to make financing more accessible, thereby enabling more businesses to invest and grow.

"The journey Juni has taken and how far they've come in such a short time is truly impressive. I've followed the company since its inception, so it's especially exciting that they have chosen Froda Embedded to continue scaling, and that Froda can be a part of their growth journey," says Olle Lundin, CEO and co-founder of Froda.

Since the launch of Froda Embedded in 2021, Froda has become one of Europe's leading providers of embedded finance solutions aimed at businesses. With Froda's technology platform, partners can either integrate Froda's services and offer them to their customers, or use Froda's funding to build their own financing solutions. Froda's license also makes it easy for partners to both increase lending and scale quickly across Europe.

The neobank Juni has come along way since its start in 2020 with the ambition to create the global business bank of the future. Juni gives businesses and finance teams modern banking solutions, spend management, financing and accounting on one powerful platform and app. With low FX fees and flexible financing Juni wants to make it easier for businesses to operate on a global scale. The company has plans to apply for a bank license for further expansion.

"Froda's license and expertise in SME lending make them the perfect partner for us. We wanted a partner that, like us, has a focus on modern solutions and technology. Through our partnership, we will be able to scale faster internationally and support more businesses," says Samir El-Sabini, CEO and Co-founder at Juni.

Both Froda and Juni were founded with the vision of helping entrepreneurs through various financing solutions. The collaboration initially means that Froda becomes a financing partner, giving Juni the opportunity to use Froda's capital pool for its services through embedded financing.

• Swedish bank Froda gets EIF guarantee enabling SEK 560 million in new lending to micro-entrepreneurs in Sweden, Denmark and Finland.
• Transaction backed by the European Union’s InvestEU programme.
• Froda to support around 3,500 small businesses with advantageous micro-loans.

Froda received European Investment Fund (EIF) backing to expand lending to micro companies in the Nordics by SEK 560 million. A guarantee from the EIF, supported in turn by the InvestEU Microfinance and Social Entrepreneurship Guarantee, enables the Swedish micro-lender to offer the new loans on favourable terms to businesses in Sweden, Denmark and Finland that have no more than nine employees.

“Access to finance is still an issue around the EU, especially when it comes to the smallest segment of businesses,” said EIF Chief Executive Officer Marjut Falkstedt. “Through special initiatives such as this InvestEU guarantee, Froda can improve its lending terms and conditions to reach out to a riskier segment of micro-entrepreneurs because we are guaranteeing part of the risk. This is a clear way in which EU finance can help the most vulnerable entrepreneurs, and we are glad to partner with Froda to make it happen.”

Apart from lowering interest rates and collateral requirements on lending by Froda, the EIF guarantee allows the Stockholm-based financial intermediary to reach new market segments. The European backing will specifically benefit micro-lending in the risky start-up field, where loan requirements were previously too high, improving access to finance across the Nordics.

“This collaboration aligns with our vision to assist as many small business owners as possible with financing on favourable terms, as the guarantees allow us to enhance access to financing at improved terms for these entrepreneurs,” said Froda CEO and co-founder Olle Lundin. “Our shared agenda with the EIF is to serve the hard-to-serve micro-enterprise segment. In the first few weeks, we have seen that over 50% of our clients are already supported by the programme.”

With an average transaction size of around SEK 160,000 (€13,838), Froda expects to serve around 3,500 micro businesses around the three Nordic countries where this guarantee will be deployed.Europe has 25 million small and medium-sized enterprises (SMEs) and one of their primary growth obstacles is a lack of available financing. Europe’s InvestEU programme, in which the EIF is a main implementing partner, aims to help micro-enterprises in the EU access the financing they need through partnerships with companies specialising in loans for micro businesses.

Background information
The European Investment Fund (EIF): The EIF is part of the EIB Group. It supports Europe’s SMEs by improving their access to finance through a wide range of selected financial intermediaries. The EIF designs, promotes and implements equity and debt financing instruments targeting SMEs. In this role, EIF fosters EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for EU policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. The InvestEU Fund is implemented through financial partners who will invest in projects using the EU budget guarantee of €26.2 billion. With the InvestEU mandate, European institutions – led by European Commission and EIB Group – aim to mobilise more than EUR 372 billion of public and private investments to finance sustainable investment, innovation and job creation throughout Europe over the period 2021-2027.

Froda was founded in 2015 with a clear mission – to democratise the access to financing and provide small and medium-sized businesses with the same opportunities for growth as large ones. Through digital processes and technological innovation, Froda has shortened the loan process from months to minutes, making it easy for entrepreneurs to invest in their ideas. Today, Froda is one of Sweden's fastest-growing tech companies with a SEK 1.7 billion valuation and well known investors such as Karl-Johan Persson, Nicklas Storåkers and Victor Jacobsson among the owners.

In 2021, Froda launched a strategic initiative in embedded financing. Through this, Froda are now present in seven markets and have established partnerships with Visa, Lunar, and Checkout.com, among others. Froda is a credit market company regulated by the Swedish Financial Supervisory Authority.