Investment & Fund Management
which was matched by the European Investment
Full Credential Description
CYPEF, established by the Republic of Cyprus, aims to enhance access to finance for small and medium-sized enterprises (SMEs) in the country. 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 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, ultimately creating a substantial portfolio of around EUR 540 million across both phases. CYPEF's financial instruments, deployed through local banks, offer favorable terms such as reduced interest rates, lower collateral requirements, extended loan maturities, and grace periods, specifically tailored to support working capital and investment loans for eligible enterprises.
The initiative supports a wide range of economic sectors, benefiting small, medium, and mid-cap enterprises, as well as self-employed individuals registered under the Cyprus social insurance scheme. CYPEF's approach includes a 'funded risk-sharing loan product' that allows selected financial intermediaries to lend at attractive costs while sharing the risk associated with individual SME loans. This strategic financial support aims to improve liquidity and strengthen the cash flow of economically viable SMEs, thereby fostering entrepreneurship and economic growth in Cyprus.