The European Investment Fund (EIF) and ProCredit group have signed a guarantee agreement on Monday to increase lending to innovative small and medium-sized enterprises (SMEs) and small mid-caps in Greece.
Under the new agreement, ProCredit group will provide 20 million euros (22.77 million US dollars) of loans to innovative companies in Greece over the next two years.
"Small companies in Greece are in great need of financing to grow their businesses and create jobs. The agreement signed today by the EIF and ProCredit with the support of the Investment Plan will help Greek SMEs access new finance," European Commissioner Dimitris Avramopoulos, responsible for Migration, Home Affairs and Citizenship, said at the signing event.
"I encourage other banks to join forces with the EIF and set up similar agreements under the Investment Plan so that we can help more Greek companies flourish," he added.
This is the first "InnovFin" transaction in Greece signed with EFSI support.
"The deal reflects the EU's commitment to rapidly launch concrete initiatives under the EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU," the European Commission said in a statement.
"InnovFin - EU Finance for Innovators" is a joint initiative launched by the European Investment Bank Group in cooperation with the European Commission under Horizon 2020. The mechanism provides guarantees and counter-guarantees on debt financing of between 25,000 euros and 7.5 million euros in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees).
"As the leading house bank for small and medium-sized enterprises in this region, we partner the InnovFin programme in seven countries and I am positive that SMEs in Northern Greece will benefit substantially," said Borislav Kostadinov, member of the Management Board of ProCredit Holding.
This transaction benefits from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe, European Commission's statement said.
The Investment Plan for Europe, known as the "Juncker Plan", aims to drive investment in strategic projects across the EU. The Plan was expected to unlock investment of at least 315 billion euros over a three years fiscal period ending in December 2017.
It is estimated that by April 2016, the EFSI has triggered more than 80 billions of investment in Europe.