ECONOMY

Plans for development bank to finance SMEs

The government is making medium-term plans for the creation of a development bank whose exclusive function will be the funding of small and medium-sized enterprises (SMEs) and youth entrepreneurship, Economy Minister Giorgos Stathakis announced on Monday.

The government plan provides for a bank along the lines of Germany’s KfW, known in this country for its contribution toward the creation of the Institution for Growth in Greece (IfG). In fact, having the new development bank cooperate with KfW and the European Investment Bank is one of the government’s aims.

The main funding tool of the new lender will be the supply of limited credit up to the amount of 25,000 euros to SMEs. The government is also examining the option of the new bank issuing special bonds tied to the projects of local authorities in order to finance infrastructure.

There are various versions under examination at the ministry, as some officials argue that the development bank could be stuctured like a cooperative bank, as the Hellenic Confederation of Commerce and Entrepreneurship (ESEE) and the cooperative lenders’ association have long proposed.