ATHENS (Reuters) - The European Investment Fund (EIF) on Monday signed three loan guarantee agreements with Greece’s National Bank (NBG) (NBGr.AT) worth 640 million euros ($791.04 million) to provide funding to small and medium-sized businesses to support the Greek economy’s recovery.
The EIF is part of the European Investment Bank (EIB) group which aims to support Europe’s micro, small and medium-sized businesses by helping them to access finance.
“Our exposure to Greece is now about 1.0 billion euros,” said EIF Chief Executive Pier Luigi Gilibert. “This has successfully catalyzed 3.5 billion euros in additional funding.”
Greece, slowly emerging from a deep financial crisis, is expected to exit its third international bailout in August. Its economy is gradually recovering. Gross domestic product grew 1.4 percent last year.
Gilibert said the EIF supports innovative companies active in sectors including artificial intelligence, fintech, big data. Its loan guarantees are risk sharing instruments, enabling banks on the ground to choose eligible firms.
Under the so-called InnovFin agreement, NBG will provide loans at favourable terms to innovative SMEs for two years. The EIF’s support for innovative Greek companies is expected to generate a portfolio of 100 million euros of loans.
The second agreement, COSME, will allow NBG to provide 500 million euros of loans to around 1,900 small businesses in Greece over three years.
EaSI microfinance guarantee, the third facility, will provide 40 million euros of loans to 3,400 micro-borrowers, very small companies which have difficulties in accessing credit across the country.
“With today’s financing agreements, the Juncker Plan continues to support Greek companies tangibly and help them grow,” said EU Migration Commissioner Dimitris Avramopoulos.
“More than 5,000 will benefit from loans, making Greece the top beneficiary of the European Fund for Strategic Investments relative to GDP.”
The investment plan for Europe, known as the Juncker Plan, focuses on boosting investment to generate jobs and growth in the European Union via smarter use of financial resources.
($1 = 0.8091 euros)
Reporting by George Georgiopoulos. Editing by Jane Merriman