The Institution for Growth in Greece will start financing small and medium-sized enterprises in June with 200 million euros provided by the Greek state and Germany’s KfW. The fund will refinance existing loans and issue new credit to SMEs.
Finance Minister Yannis Stournaras laid out the new fund’s activity on Thursday, stressing the significance of KfW’s participation, saying the German development bank will operate “as a catalyst to attract capital from private investors, too.”
Development Minister Costis Hatzidakis explained that the fund’s capital will be utilized further as the French government has expressed its determination to participate through the country’s Deposits and Consignments Fund or its Public Investment Bank, while KfW’s participation will serve to woo even more capital, he said.
Interest has also been expressed by the government in Abu Dhabi and the China Development Bank, while the fund has already signed an agreement with the Onassis Foundation for its participation with up to 30 million euros. In the next 10 days the fund will sign an agreement for the European Investment Bank to participate with input of between 50 and 100 million euros. In the long term the Greek side will contribute 350 million euros that has been set aside from the Public Investments Program and the Structural Funds.
Hatzidakis underscored that the Greek state “is not seeking a majority in the fund’s governing board, nor a majority stake,” as the main target is to attract investors. In fact, sources said that KfW will undertake the fund’s management to contribute its experience managing similar tools for funding SMEs.
Loans will be issued via Greek banks and the categories of loans will be determined in the coming months according to market needs. Among the products to be planned will be loans providing for companies to pay only for their interest for the duration of the contracts to be signed.