Cyprus & World News

Cyprus to get SME bank by end of year, low-interest loans

25 June, 2014

The alliance of small businesses and self-employed workers (SYMEA) is looking to hire staff for an SME bank and be operational by the end of the year in order to help its members gain access to low-interest loans at 2% or lower.
Alliance members have said that in 2011 alone, small to medium sized enterprises of up to 49 employees accounted for nearly 200,000 of the island’s workforce, but during the past four years, up 25 companies are shutting down daily, primarily due to the lack of funds.
SYMEA chairman Stavros Alambritis told Astra Radio that the funds will come primarily from the European Investment Bank, which is already providing lower-interest facilities to the Bank of Cyprus and the Cooperative Bank. However, the two banks remain frugal with their allocations as the EIB’s Jeremie-2 programme has increased demands for collateral, something which many small businesses can no longer afford, and bank executives have declared they intend to impose harsher conditions, with potential borrowers backing off.
On Friday, state broadcaster CyBC said that SYMEA officials met with Demetra Kalogirou, the chairman of the Securities and Exchange Commission (CySEC) who gave them the go-ahead to proceed with setting up procedures, promising to help them along the way.
Alambritis said that the bank aims to raise EUR 5 mln in capital by issuing 5,000 shares worth 1,000 euros each to SYMEA members, as well as anyone else interested to join the venture. Reports suggest that privileged members may even have access to zero-rate loans.