The Natural Disaster Recovery Microloans Fund was set up as part of the Entrepreneurship Fund III to provide micro and small enterprises and professionals in the Thessaly Region with working capital loans which can be combined with investment expenses under particularly favourable terms.
The Fund’s objective is to facilitate access to financing mechanisms by providing micro-loans to at least 480 micro and small enterprises in the Thessaly Region that have been affected by intense natural phenomena, irrespective of whether they have suffered material damage, since their normal business activity has been affected by the general consequences of natural disasters in the region.
Budget
€10,000,000 (public expenditure) with co-financing from the European Social Programme (ESF+). Including the 25% participation of financial institutions in each loan, the total loan portfolio is ~€12,000,000.
The Holding Fund is managed by the Hellenic Development Bank (HDB).
Eligible Enterprises
The Fund is for enterprises with eligible NACE codes which have their registered offices or branch of primary or secondary operations within the Region of Thessaly and have been established, which is to say they have a legal form and Tax ID No. or have commenced business in the case of a sole trader enterprise, at least 1 year prior to the application for financing being submitted to iSAMIS.
Loans may be granted:
- Via credit institutions to micro and small enterprises.
- Via a Microfinance Institution to micro entities, natural persons engaged in individual business activity, or beneficiaries of small loans as defined in Article 15(1) of Law 4701/2020 (Government Gazette 128/A/30.6.2020) as in force.
Economic advantages for enterprises
- The financed enterprise is fully exempt from interest on the part of the loan that is co-financed by the fund (i.e. 75% of each loan), since this amount is provided by the Fund interest free.
- In addition, each Financial Institution (FI) participating in the Fund is obliged to offer lower interest rates for the part it finances compared to the interest rates that would be applied to similar financing without the Fund’s participation. Please find attached the table of maximum interest rates offered per financial institution.
- The financed enterprise can receive a subsidy for mentoring to help it achieve its business plan, up to €900 per Tax ID No. (on the net value of the invoice). Note that it is mandatory to receive such services in order for the loan to be approved.
Loan Amount
The loan amount can range from €3,000 to 25,000
The loan duration may range from 12 to 96 months,including any grace period of up to 6 months.
The loan is disbursed either in a lump sum or in instalments, within a period of up to four (4) months from the signing of the Loan Agreement and in any event before the end of the Eligibility Period, namely 31/12/2029.
More specifically, in cases of partial disbursements, the total disbursement of the loan should be completed within a maximum duration of twenty-four (24) months from the signing of the Loan Agreement, subject in any event to a final disbursement date on 31/12/2029.
Only contractual collateral will be obtained to cover the debt from the loans in line with the credit policy of the financial institutions. Real collateral may not be obtained.
Financing scheme
The Fund pays 75% of the capital for each loan interest-free, while the remaining 25% is provided via the Financial Institution (Bank or Microfinance Institution) by charging the relevant interest rates in line with its credit policy. This ensures a significant reduction in the cost of financing compared to the cost of financing outside the Programme, as an overall financial benefit for Final Recipients from their participation in the Fund.
Eligible Expenses
Funding under the Fund must cover expenses included in the company’s Business Plan, which must have a maximum duration of 24 months. Submission of the Business Plan is mandatory. Expenditure incurred up to 6 months before the application for financing is submitted to the Financial Institution is accepted.
Expenditure relates to special purpose working capital loans and investment expenses. Where fixed asset investment costs are incurred which are not depreciated over the course of the business plan, they must not exceed 40% of the total financing.
Borrower training and mentoring
The Final Recipient will receive guidance on how to implement its business plan through mentoring services, the cost of which will be subsidised by the Fund. To this end, consultancy sessions of up to €900 (on the net value of the invoice) per Final Recipient Tax ID No. will be held. These services are mandatory for each loan the enterprise receives, and in all events the total cost of all loans received by each Tax ID No. (and by extension the subsidy from the Fund) may not exceed €900.
Submitting an application for financing
In order to join the Fund, the prospective enterprise submits an application:
Α. On the Know Your Customer (KYC) platform of the Hellenic Development Bank via the website https://kyc.hdb.gr/. For each completed application and after a series of eligibility criteria evaluations, the application is forwarded to the credit institutions chosen by the interested party for the submission of a non-binding offer. If the application is initially accepted, meaning the applicant receives a non-binding offer, a unique code is issued.
Β. To the Integrated State Aid Management Information System (iSAMIS), via the website https://app.opske.gr/, where the unique code from the HDB KYC platform for the finance institution is entered.
C. To the Finance Institution from which it wishes to receive financing, and from which it has already received a non-binding offer via the KYC platform, so it can evaluate the application and the supporting documents required.
In addition, the enterprise must complete a self-assessment questionnaire on 3 key criteria: Environmental, Social and Corporate Governance (ESG) on the HDB ESG Tracker platform, via the website https://esgtracker.hdb.gr/. It is necessary to fill out this questionnaire in order for the application for financing to be submitted to the Financial Institution. It should be clearly understood that the self-assessment results do not constitute a criterion for the enterprise’s eligibility for the programme.
Associated Microfinance Institutions
Credit institutions
- Alpha Bank
- Eurobank
- National Bank
- Cooperative Bank of Thessaly
- Cooperative Bank of Karditsa
- Piraeus Bank
Microfinance Institutions
- AFI Microfinance
- Microsmart
- TMEDE Microfinance Solutions
Contact – Information
For those seeking information about the Microloan Fund, the HDB can be contacted in the following ways:
Opening hours: Monday to Friday 09:00 – 17:00
Phone: 211-1058662
Email: microloans@hdb.gr
