The European Investment Fund (EIF) and Cooperative Bank of Thessaly (CBT) have signed a microfinance guarantee agreement in Greece under the EU Programme for Employment and Social Innovation (EaSI). This new financing agreement was made possible by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe.
This new guarantee agreement allows CBT to provide loans to 500 micro-entrepreneurs over the next 5 years in the Thessaly region and across Greece. Micro-entrepreneurs will be able to benefit from loans at a reduced interest rate with lower collateral requirements under the EU supported programme. CBT will primarily target start-ups, companies that have suffered during the financial crises and agro-industry businesses.
European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, said: "Today's announcement shows again that the European Commission is fully committed to supporting SMEs and start-ups that bring dynamism and job creation in local economies. The EUR 7.5 million guarantee agreement under the Juncker Plan with the Cooperative Bank of Thessaly will make loans more easily accessible to very small businesses in Greece. This builds on other similar agreements that we have started to roll out in Greece and I'm convinced that we will continue to see positive results. We know that obtaining risk finance is still a challenge in Greece and across the EU so this financing boost will make a real difference to entrepreneurs and the lives and livelihoods of many."
EIF Chief Executive, Pier Luigi Gilibert, said: “This new EaSI guarantee enables Cooperative Bank of Thessaly to boost its lending to micro-enterprises, who often struggle to access finance from traditional lenders. Micro-entrepreneurs in the region of Thessaly and across Greece will now have access to an additional EUR 7.5 million to start-up, grow and expand their businesses. I am delighted that we can sign another agreement in Greece today to continue supporting Greek companies.”
Cooperative Bank of Thessaly President, Anastasios Lappas, said: “Cooperative Bank of Thessaly welcomes today its first agreement relating to the usage of the European Financial Instruments and especially the EIF (European Investment Fund). This instrument is about guarantees for micro loans of up to EUR 25,000.00 and a total financing up to EUR 7,5 million. The source of funding derives from available funds of Cooperative Bank of Thessaly. The whole programme is the beginning of support for young entrepreneurs, start-up companies and innovative small business ideas on more favorable terms and the guarantee of the EIF. At the same time, young farmers can be funded on innovative farm exploitations as well as small businesses employing up to 10 people and turnover up to EUR 2 million.”
The EaSI Guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund. Micro-enterprises wishing to apply for a loan under EaSI, can contact CBT branches.
EIF will not provide direct financial support to enterprises but will implement the facility through local financial intermediaries, such as microfinance, social finance and guarantee institutions, as well as banks active across the EU-28 and additional countries that are participating in the EaSI programme. These intermediaries will deal with interested parties directly to provide support under the EaSI Guarantee.
About the Programme for Employment and Social Innovation
The European Commission's Programme for Employment and Social Innovation ("EaSI") aims at supporting the EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The microfinance and social entrepreneurship axis of the EaSI programme provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises. The objective is to increase access to microfinance, which includes microcredit i.e. loans of up to EUR 25,000, in particular for vulnerable persons and micro-enterprises. In addition, for the first time, the European Commission is supporting social enterprises through investments of up to EUR 500,000. The microfinance and social entrepreneurship support is currently being implemented through the EaSI Guarantee, which enables financial intermediaries to reach out to (potential) entrepreneurs that would not have been able to gain finance otherwise due to risk considerations. It is also being implemented through the ‘EaSI Capacity Building Investments Window’ to reinforce the capacity of financial intermediaries in the areas of microfinance and social finance through equity investments mostly. The European Commission has selected EIF to implement the EaSI Guarantee and the EaSI Capacity Building Investments Window.
Furthermore, the Commission is reinforcing the social dimension of the EFSI for both microfinance and social entrepreneurship. Overall, the total amount of support to these areas is expected to increase (from EUR 193 million under the EaSI programme) to about EUR 1 billion, mobilising some EUR 3 billion in additional investment.
About the European Investment Fund
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
For further information on EU microfinance and social entrepreneurship support please refer to:
About Cooperative Bank of Thessaly
Cooperative Bank of Thessaly LLC was established in Trikala (a town in central Greece) on 29th of May 1994, as a Credit Cooperative Limited and under the name of "Credit and Development Cooperative of Trikala Prefecture”. In June 1998 became a Credit Institution altering its name to "Cooperative Bank of Trikala". After gathering the required capital the creation of branches at Regional level, the Cooperative Bank of Trikala was renamed to COOPERATIVE BANK OF THESSALY.
Since the adoption of the new name the Bank pursued a policy of expansion across Thessaly covering all the prefectures by one at least branch.
The Bank is oriented to retail banking. The funds are gathered by the local community in the form of customer deposits and share capital and they are driven to loans mostly to SMEs.
All these years the Bank has utilized best practices in corporate governance that ensured better performance and cost-containment. Operating in a context of great contrasts, where the negative effects outweighed the positive and the risks were significantly high, the Bank, without receiving any kind of state aid, responded via its efficient organization and operation to any problem and succeeded to show remarkable resilience to the crisis, having all this period positive supervisory ratios.
About the Investment Plan for Europe
The Investment Plan for Europe, the Juncker Plan, is one of the EU´s top priorities to boost investments and to create jobs and growth by removing obstacles to investment, providing visibility and technical assistance to investment projects, and making smarter use of existing and new financial resources. With guarantees from the European Fund for Strategic Investments (EFSI), the EIB and EIF are able to take on a higher share of project risk, encouraging private investors to participate in the projects. The European Parliament and Member States agreed in December 2017 to extend EFSI's duration and increase its financial capacity. As of June 2018, the Juncker Plan is set to trigger more than EUR 294 billion in investment across the EU.
4 July 2018