Cyprus & World News

Cyprus Government to establish Financing Corporation

07 May, 2014

Cyprus government is focusing on establishing a private financing corporation in a bid to process and divert financial assistance from foreign national and international financing organisations to cash-strapped small and medium-sized enterprises, Government Spokesman Nicos Christodoulides told CNA.

The organisation will act as the tool that would divert financing to SME`s as part of the government`s bid to alleviate the acute lack of liquidity to private enterprises following the meltdown of the island`s banking sector and the continued recession that lead the government to request and receive a €10 billion financial assistance package from the EU and the IMF.
The issue of financing to SME`s was discussed during the working lunch between Cyprus President Nicos Anastasiades and German Chancellor Angela Merkel on Tuesday in the context of the Anastasiades` official visit to Berlin. Merkel said that Germany expressed the wish to help to alleviate problems facing the SMEs, adding that the Finance Ministers of the two countries will discuss the details and conclude on an agreement.

“On the occasion of the President's visit and the possibility of securing financial assistance not only from Germany but from other international financing organisations in general, the government is focusing on establishing a private organisation titled `Cyprus Financing Corporation` (CFC) which would attract foreign funds with competitive terms, which will be directed to local SMEs through Cypriot banks,” Christodoulides said replying to questions by CNA.
The CFC could receive and direct funds from Germany and other financing organisations such as the European Investment Bank, the European Reconstruction and Development Bank and other organisations, he added.

The aim, the Spokesman noted is to finance specific priority sectors with specific criteria such as financing SMEs and new innovative projects.