SSMMEE aac­c­c­ceessss ttoo € 995522 mm­llnn EEUU ffuunnddss rreem­maai­innss uun­nt­taappppeedd

Financial Mirror (Cyprus) - - FRONT PAGE -

Small and medium size en­ter­prises (SMEs) in Cyprus will be able to tap into a pool of EUR 952 mln, pri­mar­ily from EU struc­tural funds over the next six years in or­der to boost com­pet­i­tive­ness and drive growth.

How­ever, so far only one credit in­sti­tu­tion has shown in­ter­est to take part in a busi­ness fund us­ing Euro­pean In­vest­ment Bank fi­nanc­ing, a se­nior SME ex­pert at the Min­istry of En­ergy and Trade said.

Con­stanti­nos Kara­geor­gis, SME En­voy and Head of the Euro­pean Af­fairs Unit said that the Min­istry has al­ready started im­ple­ment­ing pro­grammes to­talling EUR 160 mln with a view to im­prov­ing the com­pet­i­tive­ness of SMEs. Ad­dress­ing a work­shop on “EU Ac­cess to Fi­nance Day” or­gan­ised by the Euro­pean Com­mis­sion Rep­re­sen­ta­tion in Ni­cosia, Kara­gior­gis said that the Cypriot econ­omy has ma­jor weak­nesses and gaps in ar­eas that pro­mote growth and that the big­gest prob­lem for lo­cal busi­nesses is the dif­fi­culty to ac­cess fund­ing and fund­ing tools.

Th­ese chal­lenges are even more ap­par­ent in new busi­nesses and ideas at a cru­cial point in their devel­op­ment, when it might be dif­fi­cult to prove their cred­it­wor­thi­ness and sus­tain­abil­ity.

There are spe­cific pre­req­ui­sites that need to be ful­filled in or­der to re­solve fund­ing prob­lems, he said, adding that the gov­ern­ment’s con­tri­bu­tion in se­cur­ing suf­fi­cient fund­ing for a busi­ness ac­tiv­ity, par­tic­u­larly for SMEs, should be a pri­or­ity.

Cypriot busi­nesses, Kara­gior­gis said, are faced with the high­est lend­ing rates in the eu­ro­zone, which are more than 2% higher than the av­er­age lend­ing rates of other EU states, while an­other chal­lenge are the strict loan terms and banks’ de­mands for col­lat­eral, of­ten at an ex­ces­sive level.

Ge­or­gios Markopouli­o­tis, Head of Com­mis­sion’s Rep­re­sen­ta­tion, said that the lack of liq­uid­ity is suf­fo­cates SMEs, rep­re­sent­ing about 90% of the is­land’s eco­nomic ac­tiv­ity, as it does not al­low them to take steps to­wards growth threat­ens their very ex­is­tence.

“Euro­pean pro­grammes can play an im­por­tant role in this di­rec­tion”, Markopouli­o­tis said, adding that the main EU fund­ing tools for the 2014-2020 pe­riod in­clude COSME, which of­fers guar­an­tees and busi­ness cap­i­tal to SMEs, and In­novFin of the Hori­zon 2020 pro­gramme which pro­vides guar­an­tees for re­search, growth and in­no­va­tion. EU’s struc­tural and in­vest­ing funds of­fer loans, guar­an­tees, busi­ness cap­i­tal or grants to SMEs, he said, re­fer­ring also to the pro­gramme on em­ploy­ment and so­cial in­no­va­tion which of­fers small grants of up to EUR 25,000.



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