OCDE - Financing SMEs and Entrepreneurs 2026 - Estonia de 2026

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FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

Key facts on SME financing In 2023, Estonian SMEs employed 83% of the workforce and accounted for 79% of total va lue added. Micro-enterprises, defined as firms with fewer than 10 employees, made up 95% of all enterprises, employing 41% of the workforce and contributing 31% of the total value added. SME interest rates rose from 4.08% in 2022 to 6.76% in 2023 and 6.92% in 2024, which in part explains a relatively modest demand for credit. Interest rates for large firms peaked at 6.49% in 2023, declining to 6.03% in 2024. The interest rate spread between SMEs and large firms widened to 0.9 percentage points in 2024, tripling compared to the previous year. Despite the increase in SME interest rates, new SME lending reached EUR 2.46 bill ion in 2024, up EUR 67 million from the previous year. This increase ended a two-year decline. Nevertheless, SMEs accounted for only 23% of the total new business lending, a figure that has steadily fallen since 2019. In 2024, outstanding business loans to Estonian SMEs totalled EUR 1.79 billi on, continuing a gradual upward trend that began in 2019. However, the SME share of total outstanding loans decli ned to 17.1%, extending a downward trajectory observed since 2021. Venture and growth capital rose steadily until peaking at EUR 1.35 billion in 2022 but has since declined significantly – falling to EUR 451.6 million in 2023 (a 67.4% decrease) and to EUR 332.8 mi llion in 2024 (a further 26.3% decrease year-on-year). The decline in venture and growth capital has coincided with the rise of interest rates and geopolitical uncertainty.

(a further 26.3% decrease year-on-year). The decline in venture and growth capital has coincided with the rise of interest rates and geopolitical uncertainty. Leasing and hire purchase turnover remained relatively stable, fluctuating within a ± EUR 50 million range over the past seven years, except for the 2020 COVID-era. It may indicate that consumer demand is consistent; however, growth might be constrained by lending conditions. Leasi ng and hire purchases increased by EUR 7 million in 2024 compared to 2023, reaching a total of EUR 76 9 million.

Estonia2 

FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

Table 1. Scoreboard for Estonia Indicator Unit 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Debt Outstanding business loans, SMEs EUR billion 2.13 1.90 1.68 1.61 1.65 1.70 1.67 1.71 1.81 1.70 1.56 1.51 1.66 1.68 1.73 1.79 Outstanding business loans, total EUR billion 6.86 6.46 5.95 6.15 6.25 6.44 6.80 7.34 6.93 7.17 7.18 7.52 8.18 8.99 9.47 10.46 Share of SME outstanding loans % of total outstanding business loans 31.01 29.37 28.28 26.24 26.45 26.40 24.56 23.23 26.1 23.7 21.7 20.06 20.31 18.70 18.28 17.1

New business lending, total EUR billion 4.46 4.26 5.06 5.61 6.17 6.41 6.68 6.99 7.19 7.92 8.15 7.37 8.81 9.58 9.76 10.54 New business lending, SMEs EUR billion 2.13 1.87 1.96 2.12 2.37 2.46 2.25 2.37 2.55 2.63 2.91 2.59 3.01 2.65 2.39 2.46 Share of new SME lending % of total new lending 47.70 43.82 38.63 37.80 38.43 38.42 33.73 33.84 35.5 33.26 35.65 35.11 34.17 27.67 24.52 23 Short-term loans, SMEs EUR million 377.1 317.8 325.9 302.3 317.4 333.4 300.8 314.8 320.1 299 263 199 187 211 192 211 Long-term loans, SMEs EUR billion 1.75 1.58 1.36 1.31 1.34 1.37 1.37 1.39 1.49 1.40 1.30 1.31 1.47 1.47 1.54 1.58 Share of short-term SME lending % of total SME lending 17.74 16.76 19.39 18.74 19.20 19.62 18.00 18.46 17.7 17.63 16.86 13.22 11.25 12.57 11.09 11.8

Government loan guarantees, SMEs EUR million 52 66 53 60 52 66 66 93 61 72 75 112.6 94 100.56 68.37 91.3 Government guaranteed loans, SMEs EUR million 86 122 116 122 100 111 112 171 100 118 145 188.13 140.1 153.72 112.27 144.67 Direct Government loans, SMEs EUR million 85.1 10 3.79 3.22 4.04 Non-performing loans, total % of all business loans 8.76 8.53 5.91 3.79 2.01 1.97 1.56 1.62 1.35 0.81 0.70 0.59 0.29 0.23 0.25 0.43 Non-performing loans, SMEs % of all SME loans 7.36 8.17 6.31 5.18 3.27 2.96 2.79 2.88 1.94 1.99 2.19 2.09 0.84 0.56 0.77 1.05 Interest rate, SMEs % 5.34 5.06 4.92 4.02 3.41 3.36 3.04 2.96 2.99 3.28 3.85 4.08 3.75 4.08 6.76 6.92

Interest rate, large firms % 4.21 3.90 3.76 3.05 2.86 2.68 2.05 2.08 2.12 2.13 2.56 2.77 2.81 3.44 6.49 6.03 Interest rate spread Percentage points 1.14 1.16 1.16 0.98 0.56 0.68 0.99 0.88 0.87 1.15 1.29 1.31 0.93 0.65 0.28 0.9 Non-bank finance Venture and growth capital EUR million 4.51 17.8 5.53 16.6 10.9 68.7 103.3 106.1 288.8 325.6 265.3 458.6 996.9 1 385 451.6 332.8 Venture and growth capital (growth rate) %, Year-on-year growth rate - 5.0 293.7 - 69 200.2 - 34 530 40.6 2.67 172.2 12.74 -18.53 72.89 112.48 35.38 -67.4 -26.29 Leasing and hire purchases EUR million 222.8 281.3 519.4 649.6 545.7 537.2 543 676 718 811 729 545 775 805 762 769 Factoring and invoicing EUR billion 0.99 0.91 1.13 1.92 1.98 2.09 2.24 2.09 2.29 3. 03 3.45 2.58 2.99 3.76 2.86 2.51 Other indicators Payment delays, B2B Number of days 12.7 12.8 10.2 10.1 9.4 7 6.9 6 5.5

6.4

5.9

Other indicators Payment delays, B2B Number of days 12.7 12.8 10.2 10.1 9.4 7 6.9 6 5.5

6.4

5.9 Bankruptcies, SMEs Number 1 055 1 028 623 495 459 428 376 335 343 273 271 341 103 98 139 157 Bankruptcies, SMEs (growth rate) %, Year-on-year growth rate 149 -2.56 -39.4 -20.5 -7.27 -6.75 -12.1 -10.9 2.39 -20.4 -1 25.8 -69.79 -4.85 42.84 12.95

Source: See Table 2. 3

FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

Macroeconomic and financing conditions In 2024 , Estonia’s GDP fell by 0.3%. The strongest positive contributions came from agriculture, accommodation and catering, information and communication, and real estate activiti es. Several other industries provided modest support. In contrast, construction, administrative and support services, and other service activities made the most significant negative contributions. Private consumption declined by 0.4% in 2024, whereas general government consumption grew by 0.3%. Despite the decline, private consumption ended the year on a positive note, whil e investments fell by6.9%, reversing a 7.5% growth recorded in 2023. Exports dropped by -1.2% compared to the previous year, while imports increased by 0.4%. As a result, Estonia’s trade deficit reached EUR 3.3 billion in 2024. SMEs in the national economy SMEs are a cornerstone of the Estonian economy, as they make up 99.9% of all registered companies. In 2024, SMEs employed 81% of the private sector workforce, accounted for 81% of total value added and

SMEs in the national economy SMEs are a cornerstone of the Estonian economy, as they make up 99.9% of all registered companies. In 2024, SMEs employed 81% of the private sector workforce, accounted for 81% of total value added and for 80% of exports. Micro-enterprises alone, comprising 95% of all firms, employed 39% of workforce and generated 32% of total value added. Between 2023 and 2024. Total number of SMEs grew 2.6% i n same period. SME lending In 2024, outstanding business loans to Estonian SMEs totaled EUR 1.79 billio n, continuing a gradual upward trend that began in 2019. However, the SME share of total outstanding loans decli ned to 17.1%, extending a downward trajectory observed since 2021. New SME lending reached EUR 2.46 billion in 2024, up EUR 67 million from t he previous year. This increase ended a two-year decline. Nevertheless, SMEs accounted for only 23% of the total new business lending, a figure that has steadily fallen since 2019 when the share stood at 36%. Short-term SME loans rose to EUR 211 million in 2024, an increase of EUR 19 mil lion year-over-year. Long-term SME loans also continued their gradual rise, reaching EUR 1.578 bill ion. The share of shortterm loans within total SME lending dropped to 11.8%, down from the 16-19% range obs erved in earlier years. Government loan guarantees to SMEs increased significantly in 2024, rising from EUR 68.37 million to EUR 91.3 million – an annual growth of 33.5% . Despite this increase, the total remains below the 2022 level of EUR 100 million. Government-guaranteed SME loans reached EUR 144.67 million, up EUR 32 million from the previous year. In contrast, direct government loans to SMEs have con tinued to decline since 2020, falling to EUR 4.04 million in 2024.

level of EUR 100 million. Government-guaranteed SME loans reached EUR 144.67 million, up EUR 32 million from the previous year. In contrast, direct government loans to SMEs have con tinued to decline since 2020, falling to EUR 4.04 million in 2024. Non-performing SME loans remain low by historical standards. In 2024, they acc ounted for 1.05% of all SME loans, a marked improvement from the 2-3% range typical between 2013-2019. Credit conditions Interest rates for SMEs have been increasing since 2021, reaching 6.92% in 20 24, reflecting an increase of 0.16 percentage points compared to 2023, and 2.84 percentage points compared to 2022 . The interest4 

FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

rates spread between large firms and SMEs stood at 0.9 percentage points in 2024 , the highest since 2021, though slightly below levels observed during 2018 and 2021. Despite this tightening, survey-based indicators offer a more nuanced picture . According to the Estonian Institute for Economic Research, just 2.25% of manufacturing firms identified access to fina nce as a significant constraint on growth in 2024, unchanged from 2023 and down from 4.5% in 2022. Meanwhile, deposits held by non-financial companies increased by 1.36% year -on-year, averaging EUR 15.1 billion per quarter in 2024, equivalent to 38.3% of GDP. Which is 6 percen tage points higher than it was in 2022. The deterioration of the economic outlook and the rapid increase in interest rates have had an impact on corporate financing in 2024. Uncertain economic outlook has reduced both companies lo an demand as well as probably influenced lenders' risk assessments when issuing loans. Following the end of a prolonged low-interest-rate environment, elevated rates in recent years have made both borrowing and raising equity significantly more expensive.

corporate financing in 2024. Uncertain economic outlook has reduced both companies lo an demand as well as probably influenced lenders' risk assessments when issuing loans. Following the end of a prolonged low-interest-rate environment, elevated rates in recent years have made both borrowing and raising equity significantly more expensive. Alternative sources of SME financing In 2024, venture capital investments in Estonia amounted to EUR 332.8 million, a signi ficant decline from EUR 1.38 billion in 2022. This corresponds to a -67.4% decline in 2023, and a further -26.3% decline in

2024. Despite a relatively modest domestic venture capital supply, Estonia boasts one of the highest rates of unicorns per capita, reflecting a strong capacity to secure funding from international investors. While the average investment size remained stable at EUR 5.7 million in both 2023 and 2024, the total investment volume and the number of investment transactions decreased, from 74 deals in 2023 to 57 in 20 24.

Leasing and factoring continue to serve as important financing sources for Estonian comp anies. Leasing and hire purchase volumes, which dropped to EUR 545 million in 2020 due to the CO VID-19 pandemic, rebounded to EUR 769 million in 2024, a modest increase of EUR 7 million compared to 2023. In contrast, factoring and invoicing volumes have been declining, falling from EUR 3.76 bil lion in 2022 to EUR 2.5 billion in 2024, returning to levels last seen in 2020 after a period of growth. Other indicators According to the Estonian Tax and Customs Board, 19 421 companies had a tax debt at the end of 2024, totalling approximately EUR 342 million. This figure remained largely unch anged from the end of 2023, when 19 830 companies had a tax debt, representing roughly 12.7% of all economically active enterprises. It is higher than in 2021, when 14 592 companies had a tax debt.

totalling approximately EUR 342 million. This figure remained largely unch anged from the end of 2023, when 19 830 companies had a tax debt, representing roughly 12.7% of all economically active enterprises. It is higher than in 2021, when 14 592 companies had a tax debt. In 2024, 157 companies were declared bankrupt, 18 more than in 2023 and 59 more than in 2022. Despite this recent increase, annual bankruptcies remain significantly lower than during the 2011-2020 period, when 300 to 600 companies went bankrupt each year. The sectors most affected in 2024 wer e manufacturing, construction, and wholesale and retail trade. The bankruptcy growth rate among SMEs declined to 12.95% in 2024, down from 42.8% in 2023. In 2023, the average delay in B2B payments was 5.9 days, compared to 6.4 days in 2019 (th e most recent comparable year). This marks an improvement and places the current delay below the average levels observed during the 2007 to 2015 period. 5

FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

Government policy response Business establishment grant scheme In 2024, Enterprise Estonia (EIS) launched a business establishment grant scheme to support individuals in starting their own companies. The measure offers up to EUR 20 000 in funding per startup, requiring a 20% co-financing from the applicant. It targets micro-enterprises that are less than three years old, with fewer than 10 employees and annual turnover under EUR 40 000. Applicants must go through a pre-evaluation process managed by regional development centres. The aim is to boost s ustainable revenue growth, employment, and innovation in the early stages of entrepreneurship. By early 2025, over 200 projects had already received funding, with the full EUR 5 million budget alloc ated. The scheme

pre-evaluation process managed by regional development centres. The aim is to boost s ustainable revenue growth, employment, and innovation in the early stages of entrepreneurship. By early 2025, over 200 projects had already received funding, with the full EUR 5 million budget alloc ated. The scheme reinforces EIS’s strategic goal of fostering a dynamic and competitive startup ecosystem. Digital Roadmap Support Scheme (Reopened in 2024) In 2024, EIS reopened the Digital Roadmap Support Scheme, which provided expert services to 146 companies. The purpose was to assess their digital maturity, identify bottlenecks and growth opportunities, and create a step-by-step plan for future digitalisation efforts. The roadmap serves as a preparatory phase for subsequent digital investments. Digital Transformation Investment Support Building on the roadmap process, nearly 100 companies received funding under the Digital Transformation Investment Support scheme, totalling around EUR 17 million. This measure helps busine sses implement digital technologies, upgrade systems, and boost productivity by funding specif ic investments based on the previously developed roadmap. Real-Time Economy Support Scheme (New in 2024) A new support measure was launched in 2024 to promote the Real-Time Economy. With a budget of EUR 1.9 million, this scheme focused on developing software solutions that enable data-based automated reporting to the government. The goal is to reduce the administrative burden for businesses and enh ance efficiency through real-time data exchange. Cybersecurity Support Scheme (Pilot Completed in 2024) In partnership with the Estonian Information System Authority (RIA), EIS completed a pil ot cybersecurity support scheme targeting small and medium-sized enterprises (SMEs). A total of 81 SMEs received external expert assistance to assess and improve their IT systems' cybersecurity. The scheme had a total budget of EUR 865,000 and proved successful, prompting plans for continuation to improve the resilience of Estonian businesses against cyber threats. Support Services for Attracting and Integrating International Talent To strengthen Estonia’s international competitiveness and address labour shortages in key sectors, EIS

budget of EUR 865,000 and proved successful, prompting plans for continuation to improve the resilience of Estonian businesses against cyber threats. Support Services for Attracting and Integrating International Talent To strengthen Estonia’s international competitiveness and address labour shortages in key sectors, EIS expanded its services in 2024 to attract and integrate international talent. Outreach v isits to universities reached 1,407 foreign students, informing them about career opportunities in Estonia. A n ew service was introduced, allowing companies to host a representative from the International House of Eston ia, who provides tailored guidance to foreign employees about adapting to life in Estoni a. Additionally, cultural integration was supported through webinars and language cafés that offered Estonian language practi ce.6 

FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

These activities enhance the retention and social integration of skilled forei gn professionals, especially in the ICT and engineering sectors. Loan Portfolio Guarantee for Micro and Small Enterprises In 2024, EIS launched a Loan Portfolio Guarantee scheme aimed at improving access to finance for micro and small enterprises. The measure enables banks and other financial intermed iaries to offer loans on more favourable terms , such as reduced collateral requirements or lower interest rates , by partially covering the lender's risk. The scheme is designed to support businesses that often face difficulties obtaining credit due to their size or lack of financial history. By enhanc ing financing conditions, this guarantee helps stimulate growth and investment in the Estonian SME sector. Figure 1. Trends in SME and entrepreneurship finance in Estonia

Source: See Table 2

0 2000 4000 6000 8000 10000 12000

A. SME loans and total business loans Annual, in EUR million Business loans, SMEs Business loans, total

0 1 2 3 4 5 6 7 8 9 10

B. SME non-performing loans Annual, as a percentage of loans Non-performing loans total, as a % of all outstanding loans

0 200 000 400 000 600 000

0 1 2 3 4 5 6 7 8 9 10

B. SME non-performing loans Annual, as a percentage of loans Non-performing loans total, as a % of all outstanding loans

0 200 000 400 000 600 000 800 000 1000 000 1200 000 1400 000 1600 000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

E. Venture and growth capital invested Annual, in EUR thousand Venture and growth capital

0 200 400 600 800 1 000 1 200

F. SME bankruptcies Annual, number

SME Bankruptcies 0 20 40 60 80 100 120 140 160 180 200

D. SME government guarantees and guaranteed loans Annual, in EUR million Government loan guarantees, SMEs Government guaranteed loans, SMEs

0 1 2 3 4 5 6 7 8

C. Interest rates and interest rate spread, Annual, in percent Interest rate spread Interest rate, SMEs Interest rate, large firms 7

FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

Table 2. Sources and definitions of Estonia Scoreboard Indicator Definition Source Debt Outstanding business loans, SMEs Loan stock in the end of the year. Does not include leasing and factoring. Loans smaller than 1 million euros are used as proxy for SMEs' loans. Bank of Estonia Outstanding business loans, total Loan stock in the end of the year. Does not include leasing and factoring. Bank of Estonia New business lending, total New bank loans within the year. Does not include leasing and factoring. Bank of Estonia New business lending, SMEs New bank loans within the year. Does not include leasing and factoring. Loans smaller than 1

New business lending, total New bank loans within the year. Does not include leasing and factoring. Bank of Estonia New business lending, SMEs New bank loans within the year. Does not include leasing and factoring. Loans smaller than 1 million euros are used as proxy for SMEs' loans. Bank of Estonia Short-term loans, SMEs Loan stock in the end of the year. Does not include leasing and factoring. Maturity less than 1 year. Loans smaller than 1 million euros are used as proxy for SMEs' loans. Bank of Estonia Long-term loans, SMEs Loan stock in the end of the year. Does not include leasing and factoring. Maturity more than 1 year. Loans smaller than 1 million euros are used as proxy for SMEs' loans. Bank of Estonia Government loan guarantees, SMEs Loans smaller than 1 million euros are used as proxy for SMEs' loans. Fund KredEx Government guaranteed loans, SMEs Loans smaller than 1 million euros are used as proxy for SMEs' loans. Fund KredEx Non-performing loans, total Bank loans overdue by more than 60 days in the end of the year. Does not include leasing and factoring. Bank of Estonia Non-performing loans, SMEs Bank loans overdue by more than 60 days in the end of the year. Does not include leasing and factoring. Loans smaller than 1 million euros are used as proxy for SMEs' loans. Bank of Estonia Interest rate, SMEs Interest rate of new long-term bank loans (flows). Does not include leasing and factoring. Loans smaller than 1 million euros are used as proxy for SMEs' loans. Bank of Estonia Interest rate, large firms Interest rate of new long-term bank loans (flows). Does not include leasing and factoring. Loans larger than 1 million euros are used as proxy for large firms' loans. Bank of Estonia Non-bank finance Venture and growth capital

Bank of Estonia Interest rate, large firms Interest rate of new long-term bank loans (flows). Does not include leasing and factoring. Loans larger than 1 million euros are used as proxy for large firms' loans. Bank of Estonia Non-bank finance Venture and growth capital Volumes in national currency and year-on-year growth rate in % non-bank finance instruments, including external equity for start-up, early development and expansion stages. Estonian Venture Capital Association Leasing and hire purchases Leasing turnover within the year. Bank of Estonia Factoring and invoicing Factoring turnover within the year Bank of Estonia Other indicators Payment delays, B2B Average payment delay measured in days. Surveyed 5 000 companies, of which 99.99% were SMEs Krediidiinfo AS Bankruptcies, SMEs Number of enterprises KrediidiinfoAS

References Bank of Estonia, database, June 2025, available at: https://www.eestipank.ee/en Estonian Institute of Economic Research database, June 2025, available at: - Maksuja Tolliameti veebileht Statistics Estonia, June 2025, available at: https://www.stat.ee/en Estonian Tax and Customs Board, June 2025, available at: https://www.emta.ee/en8  FULL COUNTRY PROFILE: ESTONIA

FINANCING SMES AND ENTREPRENEURS 2026: ESTONIA © OECD 2026

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