EIF IN
CROATIA
Investing in the future of Croatian SMEs
Small and medium-size enterprises are the heart of the Croatian economy.
Representing 99% of all businesses and more than two thirds of the workforce, Croatia's 154,000 SMEs are responsible for driving innovation as well as spurring on growth, and their daily routine is what ensures the competitiveness of the Croatian economy. But to do that, they often need finance.
At the same time, as the smallest actors in the economy, they are often the hardest hit when the economy encounters turbulence, which is why it is so crucial for them to have financial options in order to maintain and eventually grow their businesses.
At the EIF, our mission is to improve access to finance for small businesses across the EU. In Croatia, we have been supporting SMEs using a broad range of instruments, including many tailored to the needs of the Croatian market and designed with the Croatian government and local authorities.
As a result, we've been able to support more than 5,800 Croatian businesses, ranging from companies specialising in retail computer goods and cosmetic and restorative dental medicine to students undertaking IT skills training, making sure they have the financial fuel they need to pursue their ambitions.
Our intention is to continue to extend this type of support to the Croatian market, making access to finance easier as we collectively move towards a greener, digital and more inclusive Europe.
Success stories
Links
Success stories
Links
“With digitalisation, I think trends in customer needs are changing in terms of how they search for products, the service they seek, how they experience the products. With further developments in virtual reality and augmented reality, the ability of customers to experience products without touching them will cause a dramatic shift in the marketplace,” says Vlatko Skarica, Managing Director at Links, a national leader in computer goods retailing, with multiple stores across the country and a strong online presence.
The company assembles bespoke desktops for an established customer base mainly made up of gamers, but also sells computer electronics from phones to tablets, monitors, laptops and game consoles. The pandemic led to a surge in demand, which required rethinking the business. “We tried to boost stocks, but then, where do you store them? Since stores were shut, we used our floor space to stock the products, so the business kept running, employees kept coming in and the whole thing kept rolling.” Their push to digitalise the business has paid off in a distinctive competitive advantage, increased transactions, and improvements to key performance indicators.
Batak Grill
Batak Grill is a restaurant chain set up by Igor Smola and Slaven Stojic that offers a fine dining experience rooted in the draw of the traditional, local grill. “We wanted to bring something new to the market,” says Isabella Paver, Finance Director of Victus-Group, to which Batak Grill belongs, “offering the local grill but in a more modern way, catering for business lunches and celebrations, for example. For this, we picked up the best chefs from the region and we’ve been doing really well. The brand is now very well-established.”
COVID-19, however, required a new, digitalised approach. “We expanded delivery to all products and set up a dedicated centralised platform. We launched the webpage and set up a web-shop, offering things like frozen foods that people can then cook themselves, bringing the experience of Batak to your own home. The whole process was quite complex: covering all the GDPR aspects, adjusting for mobile phones and tablets, optimising for search engines, investing in marketing, setting up an invoicing and inventory management systems and of course moving also into social media too.” But the transition has been a success one.
Sven Celin
“Graz is a great city. It’s big—double the size of my hometown—but not overwhelming. People are very friendly and I’m really enjoying my time here,” says Sven Celin, master’s student in Computer Science and Software Engineering & Management at TU Graz, originally from Rijeka. “I really enjoyed science and technology classes in high school, and always liked computers,” Sven explains. “So after my first degree in Computer Science in Rijeka, I wanted to go one step further with a Masters.”
Sven’s thesis focused on gambling addiction in casinos. “We analyse datasets, looking at gamer profiles, their behaviour, and the amounts involved to study how to best target messaging to reduce addiction,” he adds. Crucially, Uni Graz offered both theory and practice: “The approach in Austrian higher education is based on learning by practicing and participating in concrete projects. This is really helpful for young people on the job market as you are employable immediately after you finish studying.” He’s already landed a job. “I’ll be doing data analysis for large storage facilities.”
Dental center Čes
After completing his dental studies at the Faculty of Medicine in Rijeka, dentist Josip Čes decided to set up his own business. “Soon after I started, my wife joined me, then my brother. The company became a true family business,” he explains. Located in central Osijek, Dental Center Čes offers services in cosmetic and restorative dental medicine, implantology and oral surgery and dentistry, with constant investments in new technologies. And all personnel take regular training courses in Croatia and abroad to keep improving technical expertise.
In order to ensure that the company is equipped with the best technology for prosthetic and cosmetic constructions, significant investment is required, though, and Dental Center Čes received a loan from PBZ, backed by EIF under the EU’s Investment Plan for Europe, which helped to purchase a 3D printer for various orthodontic appliances. With business growing, the future is looking bright. “Every year we are expanding and buying new equipment” Josip says, “Ultimately, our aim is to take your ideas and wishes and – with the help of our expertise and technology – turn them into a bright smile!”
Key figures
Over
of EIF financing
Transactions with financial intermediaries
Equity investments since inception
Guarantees support since inception
made available for
Croatian businesses
Mandates in focus
The EIF continues to deploy capital in Croatia under a wide range of strategic programmes and mandates. Below are brief summaries of our main initiatives in Croatia.
InvestEU
The InvestEU programme provides the EU with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It is helping to mobilise private investments for the EU's 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 previously available to support investment in the EU, 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 that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.
RCR
The EIB’s Risk Capital Resources (RCR) is the core pillar of the EIF’s equity activity. It has enabled us to pursue our equity strategy in the venture capital and growth segments for more than 25 years. In 2023, RCR accounted for 25% of our equity activity, committing €1.4bn to financial intermediaries.
EFSI
The European Fund for Strategic Investments formed part of the EU's Investment Plan for Europe, launched by the European Commission in 2015. EFSI addressed market gaps in financing - whether in infrastructure, research, energy efficiency or risk finance for SMEs – and mobilised private investment into these areas. Through EFSI the EIF deployed €10.5bn in resources of the European Commission, the EIB and the EIF to improve access to finance for SMEs and small midcaps.
CROGIP II
The Croatian Growth Investment Programme (CROGIP) II is a €52m investment programme targeted at fast-growing Croatian businesses. Set up in partnership with our shareholder, the Croatian Bank for Reconstruction and Development (HBOR) and aiming to boost private equity investments in Croatia, the programme will catalyse additional private-sector investments as well as support the emergence of fund managers focussing on the Croatian market. The programme is not restricted to any particular sector, although there is a 25% focus on climate action and environmental sustainability.
REPowerEU
The EU launched REPowerEU in 2022 to reduce dependence on fossil-fuel imports and accelerate the green transition. To support the plan, in October 2022, the EIB Group developed a package of measures focussing on renewable energy, energy efficiency, electricity networks and on deepening its engagement in green innovation and breakthrough technologies. Under REPowerEU, the EIF will invest €4.5bn by 2027 through EIF equity products.
EGF
The European Guarantee Fund was created by the EIB Group with contributions from Croatia and other Member States to protect companies struggling in the crisis caused by COVID-19. With almost €25bn in guarantees, the EGF allowed the EIB and EIF to swiftly offer companies, mostly SMEs and mid-caps, access to loans, guarantees, asset-backed securities, capital and other financial instruments. The EGF forms part of the package of recovery measures put in place by the EU, with the objective of providing a total of €540bn to support the hardest hit sectors of the European economy.
Croatian Venture Capital initiative 2
In September 2023, the EIF and the Ministry of Regional Development and EU Funds of the Republic of Croatia signed a new funding agreement, setting up a new €80 million fund-of-funds initiative focused on investments in innovative Croatian SMEs with high growth potential through accelerators and venture capital funds, the Croatian Venture Capital Initiative 2 (CVCi 2). The new programme will provide a further boost to the vibrant venture capital and innovation ecosystem in the country. This programme is a follow-up to the successful €35 million CVCi1 launched in 2018, which enabled the creation of Croatia’s first institutional-grade venture capital fund, including a separate acceleration compartment that has supported over 100 generally pre-revenue stage start-ups to date.