ECONOMY

Banks get green light to help SMEs get EU funding

Small and medium-sized enterprises (SMEs) in the manufacturing and tourism industries will soon be able to turn to some 1,500 bank outlets around the country for funding and professional advice for their investment programs after the Finance Ministry selected 29 banks to help facilitate the flow of community funds to the private sector. SMEs are set to receive over 600 million euros from the Third Community Support Framework for projects aimed at modernizing their production and distribution systems and boosting productivity. The 1,487 bank outlets around the country offering their services to SMEs will ensure a funding system that is speedy and transparent, the Finance Ministry said yesterday, underscoring the problems that have long plagued the management of community funds. Stung by criticism that previous community funding programs were being poorly utilized, with few visible benefits to the country, the government appeared to have improved its strategy this time round by enlisting the assistance of the financial sector. Pressure from Brussels for more concrete and rapid results has also helped. «Small and medium-sized enterprises will be able to go to their neighborhood bank without wasting time. The evaluation process will be based on objective criteria,» the ministry said. Under the scheme, the banks will evaluate projects submitted by SMEs within three months, monitor their progress and ensure their completion. Public funds will be disbursed to the companies within five days of the project’s approval. The ministry plans to put into full operation by the end of the year projects aimed at strengthening businesses with a total budget of 6 billion euros. Of the 29 financial institutions approved for the scheme, 19 are commercial banks which include the five major banks and some of the smaller ones that have mushroomed up in the last two years. Citibank, Germany’s Hypovereinsbank and the Bank of Cyprus are the three foreign banks that have received the green light for the funding program. Ten regional cooperative banks, two from Crete and the remaining from Evros, the Dodecanese, Evia, Ioannina, Pieria, Trikala, Karditsa and Lesvos, were also picked to dole out funds and advice to SMEs. The ministry is due next week to publish procedures that SMEs have to follow in order to get community funding for their projects. Greece is set to receive some 21 billion euros in community funding for the period 2000 to 2006 for projects ranging from infrastructure works to those improving the country’s competitiveness, educational system and regional development. It is the second largest recipient of net EU transfers. The State is matching EU funds with close to 32 billion euros of its own.