Extra liquidity for businesses
Development Ministry to use €800 mln to cover enterprises’ demands for working capital
The enterprises hurt by the economic crisis stemming from the coronavirus pandemic will receive additional liquidity of 800 million euros through working capital supplied with a subsidized interest rate through the second Entrepreneurship Fund (known in Greek as TEPIX II).
Development Minister Adonis Georgiadis spoke yesterday of the restarting of the program, explaining that the additional resources will be used to cover the increased demand in the first phase of the program, and not for any new applications.
Sources reveal that the additional resources have been drawn through the European Union-subsidized Partnership Agreement for the Development Framework, known in Greece as ESPA. The loans to be issued after factoring in the participation of banks, which will account for 60% of the program’s budget, will add up to €800 million; this cash will be available within this month and will in effect be handed out to satisfy part of the demand that remains pending in the credit sector but has not been covered due to the exhaustion of the program’s resources.
In the context of the first phase of the program, which started on April 28, 10,150 applications have been submitted totaling €1.3 billion. Sources say that banks have already recorded the entire amount in loan contracts. Together with the two previous TEPIX actions that started in March 2019, the Hellenic Development Bank and the commercial banks will have issued loans of €2 billion.
TEPIX was the first program launched by the Hellenic Development Bank for tackling the consequences of the financial crisis, which is why demand has risen above any expectation. The number of applications for working capital with a subsidized interest for two years had topped 100,000 and the sum demanded had reached €10 billion, leaving many applicants out in the cold.
The ministry then increased the resources available, but even that was not enough to cover demand, so a significant share of the businesses’ liquidity needs are expected to be satisfied through the Guarantee Fund that offers working capital with state collateral.