Energy Minister George Papanastasiou is at the forefront of government initiatives designed to strengthen support for small and medium-sized enterprises (SMEs).
These initiatives primarily focus on enhancing their access to finance, as well as the streamlining of procedures through the better use of technology.
Currently, the Ministries of Finance and Energy are collaboratively advancing procedures to develop effective financing solutions for SMEs.
As part of these efforts, the Ministry of Finance is set to establish and operate the National Promotion Agency.
This strategic development is scheduled for launch by the third quarter of 2025, with financial support for businesses and self-employed individuals expected to commence in 2026, subject to parliamentary approval.
This strategic development, supported by approximately €106.8 million from the government and a €59.5 million loan from the European Investment Bank (EIB), is designed to enhance financial access for SMEs, start-ups, and self-employed individuals.
In response to urgent business needs, the ministry of energy is addressing procedural challenges that hinder prompt financial support.
Businesses currently face difficulty where banks require a final government approval before issuing financing, but this approval requires a prior bank certificate for project financing.
To resolve this, the ministry, following productive discussions with Akel and dialogue with small shopkeepers’ association Povek, proposes a preliminary “intention to examine the approval of funding.”
This strategy would encourage banks to advance financing by ensuring that part of the government’s potential subsidy will be reserved in a special account for the company, contingent on final funding approval.
Additionally, the recent meeting between Akel and minister Papanastasiou led to agreement on several other supportive measures.
The intensity of subsidies for small businesses will be increased to up to 80 per cent, based on social insurance data for businesses employing up to nine people.
Furthermore, there is an agreement on simplifying application procedures using company IPs, which will facilitate direct identification of company data with various government agencies such as the tax department and social insurance.
Necessary adjustments for the digital issues related to this practice will require some time to implement.
Moreover, the creation of a help desk within the Ministry was discussed, which aligns with the upcoming reorganisation intended to enhance support for applicants.
In parallel, there are plans to collaborate with various organisations, such as the Employers and Industrialists Federation (Oev), the Cyprus Chamber of Commerce & Industry (Keve), and Povek.
This initiative will focus on identifying specific individuals within each organisation who will receive training on projects to effectively inform interested applicants.
