Avida Finans, a Sweden-based lender, made an initial investment of EUR 50 million through Funding Circle, a UK-based alternative finance platform. The funds will be loaned to SMEs in the Netherlands and Germany and will be distributed over nine months. Avida and Funding Circle said the partnership is long-term and that the amount of funds delivered will likely increase in 2020.

This partnership represents the first time a Nordic financial institution has invested in loans for SMEs via an online loan platform.

With the partnership, Avida becomes part of a growing group of companies backing SMEs, including the EIB, local and regional governments, pensions funds, and 90,000 individual investors.

Funding Circle Netherlands Director, Jeroen Broekema, said that, “lending platforms have opened up the SME loan asset class to a variety of investors thereby ensuring that the engine of the real economy has access to much-needed finance”. Avida’s CEO, Tord Topsholm, commented that the partnership gives them, “an excellent complement to our home market in the Nordic region as we now have the opportunity to reach a market we could not tap into without Funding Circle’s platform”.