The European Investment Bank (EIB) and the Finance Ministry signed on Thursday loan contracts for investments in Cyprus’ small and medium-sized enterprises and medium capitalisation companies (midcaps), amounting to €150 million.
The loans managed by four Cypriot banks will help bolster liquidity, support economic recovery and create jobs, EIB said.
Of the €150 million granted by EIB with government guarantees, €100 will be allocated to Bank of Cyprus, while banks RCB, CDB and USB, which participate in the scheme for the first time, will receive €20 mln, €15 and €15 mln respectively. The loans support new investments promoted by viable and eligible companies with up to 3,000 employees which require financing up to €25 mln.
Speaking at the signing ceremony, both Finance Minister Harris Georgiades and EIB Vice President Jonathan Taylor noted that Cyprus is showing signs of recovery following a three-year financial crisis but noted that challenges still lies ahead.
In his remarks, Georgiades said the funds allocated by EIB to Cypriot SMEs in 2015 were instrumental in lifting the local economy out of the long recession of the previous years and expressed gratitude for the EIB for its strong and decisive support.
“As far as we are concerned we remain fully committed in maintaining the reform effort and the fiscal discipline long after the Troika goes. In this way we shall fully re-establish the confidence of investors and we shall keep Cyprus firmly on the track of recovery and growth,” he concluded.
On his part, Taylor reiterated the EIB`s strong commitment to the Cypriot economy during the financial crisis that hit the country in 2013. “Through these challenging times for you country the EIB stands by you as a steadfast and reliable partner,” he said, recalling the EIB support has invested €1.3 billion in the last five years.
“The Cypriot economy has been showing positive signs over recent months, no doubt a testament to the had work and resolve of the Cypriot people and the successful measures taken by the Ministry of Finance,” he said.
However he stressed that challenges still lie ahead, noting that “the EIB will continue supporting worth-wile investments that can bring back growth and development further improving Cyprus economic situation.”
Speaking at the ceremony, Charis Puangare, Director of Bank of Cyprus Consumer banking and SMEs said these loans will strengthen the local economy and create opportunities for growth and job creations.
“Today`s contract strengthen the bank`s efforts and to support new investments and consequently accelerate further economic development in Cyprus,” he said.
Kiril Zimarin CEO RCB “our common goal is to achieve viable growth for the Cyprus economy by supporting SMES with competitive lending solutions” and added “this is another step forward in the effort to support economic growth and activity as confidence in the Cyprus economy is growing.”
Noting that a lot has been achieved in the past years, Zimarin, said “there is still a long way to go and we must remain focused avoiding the mistakes wrong practices and the mentality of the past.”
Kyriakos Papadopoulos, the CDB`s CEO, said on his part the bank is aware of the impact brought upon the Cypriot SMEs by the financial crisis.
“We therefore welcome the EIB development loans which will help rekindle the economy and promote growth and job creation by providing long-term and low cost financing to these enterprises,” he said.
Andreas Theocharides CEO of USB said SMEs and midcaps are the backbone of the economy, as they are important drivers of growth and innovation, employ a large number of active working population.
“Through these funding programmes and in line with good responsible banking we can help innovative businesses to start up an existing businesses to grow and become competitive,” he concluded.