Microfinance Fund: Low-interest loans from up to 25,000 euros to professionals and small businesses
The granting of low-interest loans of 3,000 euros to 25,000 euros to existing very small enterprises (including cooperatives and social enterprises) and self-employed who want to implement their business idea will be tasked with the Microfinance Fund, the establishment of which is expected from the new year by Hellenic Development Bank (HDB).
Specifically, the Special Program Management Service “Competitiveness” issued an invitation addressed to the Hellenic Development Bank, for the submission of project proposals (operations), in order to be included and financed within the framework of Program.
The Fund’s contribution to Microfinance Institutions will be 60% in general entrepreneurship and 75% in women’s entrepreneurship. The loans will be granted without collateral, with the repayment period of the microcredits ranging from 12 months to 10 years, while the Fund’s budget is 60 million euros.
Regarding the operation of microfinance institutions in Greece, to date three microfinance institutions have received operating licenses from the Bank of Greece:
- TMEDE Microfinance Solutions
- Microsmart
- AFI Microfinance
This invitation will remain open until the end of the year. Then, depending which of the three licensed entities show interest, the Hellenic Development Bank will sign a contract with them and the granting of loans will begin.
Consulting services
Besides the granting of microfinance, the institutions are obliged to provide the beneficiaries with advisory services of business training in management techniques, support for solving legal, tax and administrative problems and guidance.
Consulting services include in particular:
a) business training in the management techniques of very small entities, in terms of accounting management, financial management and personnel management,
b) support for solving legal, tax and administrative problems and information on the relevant services available on the market,
c) support for defining the path of integration into the labor market,
d) support for identifying and diagnosing the possible criticality of the implementation financed project.
Lending Terms
Microcredit companies enter into a contract with the beneficiaries, in which -among other things- describe the lending conditions and in particular:
a) the interest rate of the microfinance, indicating whether it is fixed or floating or a combination of both, as well as information on any charges included in the total cost of the credit for the consumer
b) the total cost of the microfinance
c) the repayment period of the microfinance
d) the number and amount of installments
e) the content of consulting services and their costs
f) the procedure for collecting outstanding debts
g) the right to terminate
h) the procedure for out-of-court dispute resolution
It is emphasized that the beneficiary has the right of withdrawal within 14 days of the signing of the contract, regardless if during this period the loan has already been disbursed. In the latter case, the total amount is returned without interest in full, once, at the same time as the declaration of withdrawal, but the borrower is charged with the corresponding administrative costs.