SME bank by end of year, low-in­ter­est

Financial Mirror (Cyprus) - - FRONT PAGE -

The al­liance of small businesses and self-em­ployed work­ers (SYMEA) is look­ing to hire staff for an SME bank and be op­er­a­tional by the end of the year in or­der to help its mem­bers gain ac­cess to low-in­ter­est loans at 2% or lower.

Al­liance mem­bers have said that in 2011 alone, small to medium sized en­ter­prises of up to 49 em­ploy­ees ac­counted for nearly 200,000 of the is­land’s work­force, but dur­ing the past four years, up 25 com­pa­nies are shut­ting down daily, pri­mar­ily due to the lack of funds.

SYMEA chair­man Stavros Alambri­tis told As­tra Ra­dio that the funds will come pri­mar­ily from the Euro­pean In­vest­ment Bank, which is al­ready pro­vid­ing low­er­in­ter­est fa­cil­i­ties to the Bank of Cyprus and the Co­op­er­a­tive Bank. How­ever, the two banks re­main fru­gal with their al­lo­ca­tions as the EIB’s Jeremie-2 pro­gramme has in­creased de­mands for col­lat­eral, some­thing which many small businesses can no longer af­ford, and bank ex­ec­u­tives have de­clared they in­tend to im­pose harsher con­di­tions, with po­ten­tial bor­row­ers back­ing off.

On Fri­day, state broad­caster CyBC said that SYMEA of­fi­cials met with Deme­tra Kalo­girou, the chair­man of the Se­cu­ri­ties and Ex­change Com­mis­sion (CySEC) who gave them the go-ahead to pro­ceed with set­ting up pro­ce­dures, promis­ing to help them along the way.

Alambri­tis said that the bank aims to raise EUR 5 mln in cap­i­tal by is­su­ing 5,000 shares worth 1,000 eu­ros each to SYMEA mem­bers, as well as any­one else in­ter­ested to join the ven­ture. Re­ports sug­gest that priv­i­leged mem­bers may even have ac­cess to zero-rate loans.

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