Investment & Fund Management

CYPEF, established by the Republic of Cyprus, aims to bolster entrepreneurship by enhancing access to finance for small and medium-sized enterprises (SMEs). The initiative faced the challenge of providing adequate financial support to SMEs, particularly in light of the financial difficulties exacerbated by the COVID-19 crisis. To address this, the Cypriot government allocated an initial EUR 70 million for phase 1, which was matched by the European Investment Fund (EIF) and financial intermediaries, resulting in approximately EUR 140 million available for Cypriot SMEs.

In June 2021, a continuation of the CYPEF initiative was signed, introducing phase II with an additional EUR 200 million contribution from the Republic of Cyprus. This funding is designed to meet the new investment needs of SMEs and midcaps while addressing the financial challenges posed by the pandemic. The combined phases are expected to create a substantial portfolio of around EUR 540 million.

CYPEF's financial instruments are deployed through local banks selected by the EIF, which offer financing to eligible SMEs at favorable terms, including reduced interest rates, lower collateral requirements, extended loan maturities, and grace periods. This tailored approach ensures that a wide range of enterprises, including self-employed individuals across various economic sectors, can access necessary funding for both working capital and investment loans. The initiative not only supports the liquidity and cash flow of SMEs but also aims to improve their overall financial conditions through refinancing options.