The agreement will provide facilities totalling EUR228m from the European Investment Bank; EUR120 will go to Bank of Cyprus, while Marfin Popular Bank and the Hellenic Bank will receive EUR50m and EUR58m, respectively.

The funds will be used to provide finance to small- and medium-sized enterprises (SMEs) in the fields of industry, commercial services and tourism in Cyprus. The lending facilities signed with the Bank of Cyprus and Hellenic Bank will also be able to fund SMEs located in Greece.

The Cypriot Minister of Finance, Charliaos Stavrakis commented:

“The new EUR228m EIB financing facility will offer enhanced possibilities for meeting the liquidity needs of Cypriot SMEs in the current economic crisis. The funds will be used for financing enterprises in industry, tourism, trade and, more generally, services. I am sure that these funds will be used for the benefit of our enterprises. We are interested in considerably improving financing opportunities for smaller companies, by increasing the amounts available and offering greater flexibility as well as new financial products. Our objective, which is also our obligation, is to utilise all available development tools, such as those offered by the EIB to the European economies. We therefore signed recently with the EIB Group a EUR20m funding and management agreement for the implementation here in Cyprus of the Joint European Resources for Micro- to Medium-Enterprises initiative, known as JEREMIE. Today we take a further big step forward."

EIB Vice-President Mr Sakellaris commented at the signing ceremony:

“The signature today marks a milestone in our activity in Cyprus: quantitatively as it is the biggest-ever for SMEs, qualitatively, as it is a new product and involves a wide alliance with Cypriot partners, and, in terms of timing, it coincides with the fifth anniversary of Cyprus’s accession to the European Union. Now is the time to work together to restore the growth that can only come from strong and flourishing enterprises that harness innovation and advance opportunity.”

“The success of the Cypriot economy is inextricably linked to small businesses, so we are therefore acting boldly in favour of Cypriot SMEs. Our action is amplified by the synergy with our partner banks Bank of Cyprus, Marfin Popular Bank and Hellenic Bank. Further synergies to benefit Cypriot SMEs have been sought within the framework of JEREMIE, for which we held a working session here yesterday, involving most banks working in Cyprus as well as representatives of SMEs. Our future action, though, will not be limited to SMEs,” he further added.

Mr Shiarly, Bank of Cyprus Group General Manager Domestic Banking stated:

“SMEs are undoubtedly the backbone of the economy of Cyprus. Throughout our 110 years of history we recognised their importance and consistently, through good times and bad, at times of peace or war, we stood by and supported Cypriot SMEs, which comprise almost 100% of all businesses in Cyprus. In today’s troublesome times and in the midst of an international financial crisis, these loans from the EIB will enhance our lending liquidity and our ability to continue our support for and offer competitively priced loans to SMEs.”

Mr Efthymios Bouloutas, Chief Executive Officer of Marfin Laiki Bank said:

“Marfin Laiki Bank puts special emphasis on the financing of SMEs, which form an important part of our customer base in Cyprus. Some months ago, when the crisis was seen as a serious threat, the management of the bank took the decision to strengthen our presence in this sector, and we are very pleased that this aim will now have the support of the European Investment Bank. I would like to take this opportunity to underline that the capital provided for under the present agreement will be directed exclusively towards supporting SMEs in Cyprus, since we have signed another agreement with the EIB for the Greek market.”

Mr Keravnos, CEO of the Hellenic Bank Group welcomed the signing of the agreement with the European Investment Bank:

“These new funds of approximately EUR 250 million drawn from the EIB will enhance our ability to help small and medium-sized enterprises with loans on favourable terms, a grace period and on much improved terms than the ones offered today.” Mr Keravnos emphasised that “Hellenic Bank, being a socially responsible organisation, predicted at a very early stage the adverse effects the global financial crisis would have on both the real economy and SMEs. For this reason, Hellenic Bank was the first Cypriot bank to apply promptly to the European Investment Bank for lending facilities regarding the funding of SMEs, in an effort to provide effective help and support both its customers and the entire business world of Cyprus."