HDB: The bank for SME entrepreneurship
Hellenic Development Bank – HDB is the country’s only financial and development institution, with the main mission of expanding the access of small and medium enterprises (SMEs) in national and EU resources. The Hellenic Development Bank-HDB is the entrepreneurship bank of SMEs” said the president and CEO of the Hellenic Development Bank-HDB, George Zavvos, in the Press Conference entitled “Investment tools for the support of entrepreneurship and the improvement of infrastructure”, quoted by the Deputy Minister of National Economy and Finance, Nikos Papathanasis.
HDB supports the Government’s Development Policy by creating appropriate financing tools, for “green” and digital transformation of small and medium entrepreneurship and in this way contributes to the transformation of the productive model of the economy.
Over the last 4 years, HDB granted 45,288 loans totaling €9.4 billion, proving that it has a catalytic role as a multiplier mechanism for leveraging public funds, filling market gaps.
The three axis of the HDB strategy
The 3 axes of strategyof the Hellenic Development Bank-HDB in the new cycle of the Greek economy are:
- the significant increase in the number of financed small and medium enterprises
- the active support of the sustainable development and innovation of SMEs and
- the extraversion based on the extraction of EU funds intended for non-EU member states. and the close cooperation with national development banks
“The synergy of these values creates a dynamic environment for the business activity of SMEs which contributes decisively to the ambitious goals of the restructuring of the Greek economy implemented by the government”, he added.
The implementation methods
Mr. Zavvos presented the ways to implement this strategy:
“In a time of high interest rates, energy crisis and geopolitical tensions, HDB provides solutions to market challenges, helping to reduce financing costs with specialized tools that provide:
- Interest-free loan co-financing by 40% or 50% or 75%
- Loan guarantee by 80% with subsidized bank loan interest rate and significant reduction of collateral requirement
- Interest rate subsidy for the initial period of the loan as additional support.
- Reduction of loan capital by achieving goals (such as with the Innovation Fund)
- Long loan grace period (36 months)
- Long-term loans (10 years)
- Non-financial support mechanisms”.
“It is worth noting that the average interest rate for example in the month of September with the intervention of the Development Bank reached 3.68%, much lower than that of the market which reached 7.13%“, he underlined.
He added that “the HDB by leveraging 4.5 billion euros of public funds brought 12.3 billion euros into the market, which means that it works as a multiplier mechanism for attracting private funds”.
Also, he referred to the emphasis placed through HDB programs on lending to very small businesses, as of the businesses that benefited from HDB programs 75% had up to 10 staff and 81% up to 2 million euros turnover.
It is worth noting that in the Liquidity Fund, with a total loan portfolio of over €727 million, 32% of businesses had never received any form of support from HDB. 32% of businesses received an additional 3% interest rate subsidy for the first 2 years, with the cost of the subsidy reaching 3.9 million euros.
Mr. Zavvos also presented the “new generation” programs of the Development Bank that contribute to “green” and sustainable development. These are the green co-financed and digital upgrade loans with a budget of 590 million euros.
Special mention was made of HDB’s KYC platform, which contributes to widening the access of SMEs to the financial system and enables the loan applicant to be visible throughout the financial system.
Finally, in the context of extroversion, Mr. Zavvos pointed out that the acquisition of the “Pillar Assessment” certification is a key strategy of HDB. This is a certification that will allow HDB to draw directly from EU funds to finance its programs, as well as EU funds intended for the expansion of investment activities in non-EU member states