The European Investment Bank has agreed to provide 40 million euros in funding for Piraeus Bank’s planned 90-million-euro portfolio for supporting small and medium-sized enterprises (SMEs). The EIB said in a press announcement earlier this week that the agreement incorporates an initiative for offering competitive borrowing rates to businesses that promote youth employment.
“Supporting private sector growth and investing in young people are principal objectives of the European Investment Bank’s engagement in Greece,” Jonathan Taylor, EIB vice president responsible for lending in Greece, said in the announcement.
“Piraeus Bank is a key partner for the EIB in Greece and our combined efforts will help companies across the country expand business activity and create much needed jobs,” Taylor added.
The new agreement expands on a previous partnership under the Grouped Loans for SMEs program and will allow Piraeus to eventually extend liquidity in the form of working capital to support the expansion of the existing supply chain.
The Greek lender will channel the 40 million euros toward industry, tourism and service sector companies, and particularly those that adopt initiatives to boost employment among young people in Greece, where youth unemployment stands at around 50 percent.
Launched in summer 2013, the EIB’s Skills and Jobs – Investing for Youth program is aimed at lending to banks in countries where labor market conditions are adverse for young people looking for work. The aim is to finance vocational training and student and apprentice mobility, while also encouraging small businesses to generate more work for young people.
The first agreement in Greece under the scheme was signed last month with Pancreta Bank, which also received 40 million euros to provide liquidity to SMEs that boost youth employment. Pancreta aims to have completed its distribution of the EIB funding by the end of the year, focusing particularly on Cretan companies that meet the criteria of the initiative.
The EIB has provided 215 million euros for investment in Greece in 2016.