Société Générale, a France-based banking group, and European Bank for Reconstruction and Development (EBRD), have joined together to boost lending the real economies of eastern Europe. EBRD is planning to make investments of around €400 million via loans to several eastern European subsidiaries of the French banking group.
Reportedly, the majority of the EBRD funding to the subsidiaries is for SME lending via loans to Société Générale units that are of systemic importance in their countries and which have SME sector expertise. It aims to mount a collective response to the crisis that keeps the immediate flow of credits running to eastern European economies but also lays the ground for continued engagement in the region by the major banking groups.
EBRD investment is part of a joint pledge by the EBRD, the World Bank Group and the European Investment Bank (EIB) to provide over €24 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis.
EBRD expects to invest a total of over €3 billion in support of the financial sector this year, focussing on systemically important financial institutions including other joint initiatives with major banking groups active in the region.
Frédéric Oudéa, chairman and CEO of Société Générale, said: This joint initiative will help address the current challenges faced by economies in central and eastern Europe, as it will increase Société Générale’s capacity to serve and accompany its clients in the region.”
