Hellenic Bank, third largest Cypriot lender, said that the deal, the fourth of its kind, will allow it to provide financing of almost €53.4m to SMEs at low rates.

“The amount includes €40m in EIB funds and €13.4m in Hellenic Bank funds,” the bank said in an emailed statement on Wednesday, hours after signing the agreement. “The creation of the right fundaments for the future by providing liquidity to solvent SMEs whichconstitute the backbone of our economy, remains Hellenic Bank’s aim”.

The Cyprus Cooperative Bank’s chief executive officer (CEO) Nicholas Hadjiyiannis said that the state-owned bank already extended loans worth €25m to 116 SMEs via a scheme which included financing from the Luxembourg-based EIB.

“The most important economic sectors financed by the Cyprus Cooperative Bank concerned tourism, services, trade, healthcare, industry and agriculture,” he was quoted as saying in an emailed statement.

According to the Cyprus News Agency (CNA), Finance Minister Harris Georgiades signed the agreement on behalf of the Republic of Cyprus and the EIB’s Central and South-Eastern Europe director Anita Fuerstenberg-Lucius did so on behalf of the European Union’s bank. Hellenic’s CEO Ioannis Matsis and the Co-op’s CEO signed the agreement on behalf of their respective lenders.

The finance minister said that the cooperation with the EIB has allowed banks to extend 269 loans worth €440m to SMEs allowing the materialisation of 340 investment projects, which in turn helped create 821 jobs and boost growth by 0.3 percentage points in 2015 and almost 0.5% in 2016.

Georgiades added that the loans extended as part of the cooperation with the EIB are performing.

“This is important also for our banking system, because extending healthy credit is likely the best way to tackle old delinquent loans and consolidate the balance sheet of banks,” he was quoted as saying by the CNA.

Fuerstenberg-Lucius said that Cyprus is the country which benefited the most compared to the economic output from loans from the EIB which made €333m available and disbursed more than €260m to the public and private sector last year, according to the CNA.

Source: Cyprus Mail