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Reform Support

Supporting reforms to develop well-regulated, stable and competitive financial markets

Funding Programme
Technical Support Instrument (TSI)

Creating a new fund to support SMEs’ access to finance in the Baltic Region

The Commission aims to help Estonia, Latvia and Lithuania develop a capital market easing small and medium-sized enterprises (SMEs) financing solutions. To do so, a new fund, the Capital Markets Development Accelerator Fund (CMDAF), has been designed and launched to facilitate equity financing for SMEs. By supporting the offering of SMEs listed in stock exchanges, the CMDAF will increase the liquidity in the secondary market and boost the availability of investment products in the local capital markets.


The growth of SMEs in the Baltic States has been hampered by the lack of access to finance. Over the past years, banks were ever more reluctant to finance SMEs, considered to be risky investments, and regulatory burdens constrained entry on capital markets. With limited financing possibilities, SMEs could not achieve their full potential, affecting social welfare. Addressing the SMEs funding gap is therefore essential for the region's economy while also fulfilling some key objectives of the Commission’s Capital Market Union Action Plan to enhance access to finance where the need is most critical.

Support to be delivered

The European Commission, in collaboration with the EBRD, will assist the Ministries of Finance of Estonia, Latvia and Lithuania in designing a regional CMDAF that will address these constraints. A mapping of the regional market was realised and a feasibility study was already concluded with examples of other similar funds. Thanks to these analyses, key features of the future fund were laid out and a roadmap was settled to test it on the market. The ultimate objective is for the fund itself to be listed for the market to become more liquid.  

Expected results

With the successful launching of the CMDAF, the local regional economy will develop effective and versatile SME equity financing channels. It will also contribute to the primary and secondary capital market development of the EU Member States equity capital markets, thanks to an increased regional market liquidity, enhanced investor pools, cross-border trading, clearing and settlement. Most importantly, it will allow institutional investors, which normally shy away from smaller transactions, to participate in the SME growth market segment through a specifically designed investment vehicle.