Of the approximately 3–4 billion euros in investment projects that were excluded from financing through Recovery and Resilience Facility (RRF) loans, slightly more than half are expected to receive direct loan support from banks, as they meet the criteria. The remainder will be reviewed on a case-by-case basis depending on the companies’ creditworthiness.
At the same time, funding for small and medium-sized enterprises is expected to begin flowing this fall from the 2 billion euros available through the Hellenic Development Bank. According to estimates, the 2 billion euros, when leveraged, can generate loans totaling up to 8 billion euros.
Revenue Growth
Banking sources emphasize to Euro2day.gr that there are projects that are directly financed, as they involve large enterprises, while others are also financed but at a higher cost in terms of financing conditions, and a certain percentage will be excluded due to eligibility criteria.
For the banking system, direct lending further supports the pace of credit expansion as well as revenue, since these loans will be granted at market interest rates rather than the lower rates of the RRF.
“The key point is that these projects will be largely financed, and investments will move forward,” a bank executive told Euro2day.gr, adding: “This is not the time for the country to lose out on investments. There was indeed a misalignment between supply and demand for the Fund’s loans in recent months, but the priority now is to continue financing businesses and investments.”
Funding from the EAT Begins to Flow
Sources within the economic team emphasize to Euro2day.gr that the flow of funding to small and marginal medium-sized enterprises, kickstarted by the 2 billion euros from the Hellenic Development Bank, is expected to begin in early fall, as this is a key pillar of the development policy the government is planning ahead of the announcements at the Thessaloniki International Fair.
Given that these funds were transferred from the lending arm of the Recovery Fund, their interest rates will be low (ed. note: ranging from 0.35% to 1%).
Although it is too early to estimate the number of businesses that will potentially receive funding, it is estimated that the figure will exceed 30,000.