Insider Economy State mulls €2 bil in guarantees to unlock credit to the economy...

State mulls €2 bil in guarantees to unlock credit to the economy amid Covid-19 crisis

The Cyprus government is considering a plan to provide state guarantees to banks amounting to €2 billion, in a bid to unlock credit to self-employed, small and medium-sized enterprises and large corporations, hit by the coronavirus epidemic.

The plan, which will be put into consultation with the Cypriot banks provides for the granting of government guarantees to SMEs and self-employed persons amounting to €1.7 billion and €0.3 bl for large corporations.

The aim of the plan, a copy of which was obtained by CNA, “is to provide state government guarantees with a total amount of up to €2 billion to Cypriot licensed banking institutions, including subsidiaries of foreign credit institutions with the purpose to provide loans to companies and self-employed persons (to help them) to deal with the consequences of the measures to combat the coronavirus (epidemic).”

The plan aims to cover the credit risk encouraging the bank to provide cheap new loans from April 2 until the end of the year, as well to cover the credit risk current loans of Self-employed persons, SMEs and large corporates which have been hit by the coronavirus epidemic.

Furthermore, the plan also covers the issuance of current accounts and overdrafts that may not exceed 50% of amount offered to a self-employed person, 25% of the amount provided to an SME and 15% of large corporation.

“The provision of loans aims to cover the companies’ and self-employed persons’ liquidity needs, working capital and investments,” the draft reads.

However, the draft makes clear that self-employed or corporates that had non-performing exposures at the end of 2019 will not be eligible for the plan.

As far as the limit of loans is concerned, the draft notes that a loan cannot exceed an amount that is double of a company’s or a self-employed total annual wage bill in 2019 or the latest available year, or cannot exceed the annual wagebill for the first two years of operation in case of companies or self-employed persons that began operations in January 2019.

According to the draft, in some justified cases and based on liquidity plans, loans can be increased to cover the liquidity needs for the next 18 months in case of a self-employed person or an SME and the next 12 months when it comes to a large corporation.

According to the draft, the plan will be put into force on April 2 until the end of the year.

(CNA)

Top Stories

President says EU should have active part in upcoming Cyprus high-level meeting

President Nicos Anastasiades has told the EU High Representative of the Union for Foreign Affairs and Security Policy Josep Borrell the EU should have...

Tuesday will be breezy with rain and isolated thunderstorms

Tuesday will be breezy with rain, isolated thunderstorms and light snow falling on the top peaks of Troodos mountains. Winds will be westerly to south-westerly,...

162 new cases, five deaths announced on Monday

The Health Ministry announced the death of five persons due to COVID-19. This raises the death toll from the virus in Cyprus to 175,...

Where to get antigen rapid tests on Tuesday

The Health Ministry announced the following antigen rapid test sites for Tuesday, 19 January 2021: LIMASSOL Apostle Loucas Church, Agios Athanasios 08:30-16:30 Agios Stylianos Church, Linopetra 08:30-16:30 Cultural...

Searches for 70 year old woman missing at sea suspended due to bad weather

Searches to find a 70 year old woman missing off the Phiikoudes beach in Larnaca have been suspended due to extremely bad weather conditions...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...