On July 3, the government authorized the Minister of Regional Affairs and Agriculture to create a 55 million euro trust fund through the Rural Development Foundation (MES) to support rural entrepreneurship — including agriculture, the food industry and other rural businesses that lack access to traditional capital.

According to Minister of Regional Affairs and Agriculture Hendrik Johannes Terras, the goal is to alleviate market failures: “Agricultural businesses, the food industry and rural businesses are important economic drivers. When making investments, access to capital must be ensured so that they can grow, innovate and contribute to the development of rural Estonia.”

MES Director Meelis Annus adds that the fund will help direct money to where the demand for capital is greatest: “Capital must be directed to areas where it is needed most. This way, we ensure that the subsidies reach the right place and their impact on the development of the rural economy is as great as possible.”

Such an investment is expected to improve rural businesses' access to favorable investment financing and facilitate, for example, equipment procurement, production buildings and network upgrades. Both financial instruments and loan products will be supported, which complement existing financing options.

Changes are also underway in the loan conditions of the Rural Development Plan: minimum interest rates and co-lending requirements have been reduced to make it easier for entrepreneurs to obtain capital. For example, the interest rate for micro and small enterprises was lowered to up to 1%, and the share required from the bank for co-lending changed from 50% to 30%.

This government decision to allocate 55 million euros to rural entrepreneurship creates a strong foundation for sustainable development. The support is not limited to money, it also includes easing conditions and targeting funds to support those entrepreneurs and projects that need it most. All this is done in order to grow jobs in rural areas, strengthen local value chains and promote the entire rural economy.