Cyprus and the European Investment Fund (EIF) signed on Monday an agreement on the management of the Cyprus Entrepreneurship Fund by EIF.
According to an official press release, the agreement was signed on behalf of the Republic of Cyprus by Permanent Secretary of the Directorate General for European Programmes, Coordination and Development Giorgos Georgiou.
“The Cyprus Entrepreneurship Fund aims at improved SME funding, given the liquidity problems the Cyprus banking system faces today”, the press release says.
It is further added that “it is expected to contribute to enhanced investment activity and to the creation of new jobs”.
The Cyprus Entrepreneurship Fund is financed through a €100 million loan to the Republic of Cyprus by the European Investment Bank (EIB), secured in a loan agreement signed on 13 December 2013.
According to the press release, “it will be implemented in cooperation with financial institutions which will be selected through a call for expression of interest published by the European Investment Fund in the beginning of March”.
Financial institutions will co-finance at least 50% of the loans, which means that the total sum of financing expected to be given to SMEs will amount to at least €200 million.
The allocation of resources to SMEs will be realized through the granting of loans with particularly favourable terms as regards the interest rate and repayment period.
It is noted that loan beneficiaries also include primary sector SMEs, and that Structural Fund co-financed projects will also be eligible for financing through the Cyprus Entrepreneurship Fund.
