EU and EBRD launch SME competitiveness integrated finance facility in the Turkish Cypriot community

By EBRD  Press Office
@ebrd


Facility will provide SMEs with access to finance and advice to develop and grow their businesses

The European Bank for Reconstruction and Development (EBRD) has launched its Advice for Small Businesses (ASB) programme for the Turkish Cypriot community, funded by the European Union, as part of its effort to support small businesses and help them improve their performance and growth.

To mark the start of activities, the EBRD organised an event at the Merit Hotel in Nicosia on Thursday which brought together donors, civil society organisations, local banks, business associations, local enterprises and consultants. Ali Çıralı, President of the Cyprus Turkish Chamber of Industry and Fikri Toros, President of the Turkish Cypriot Chamber of Commerce, opened the event with keynote speeches. For the EBRD speeches were delivered by Libor Krkoška, Head of the Nicosia Resident Office and Jaap Sprey, Head of the ASB Regional Programme. The European Commission (EC) was represented by Michela Foresti, Head of Programme Team of the EU Programme Support Office to the Turkish Cypriot Community.

Many businesses in the Turkish Cypriot community struggle to compete in domestic and foreign markets and most goods are imported. Private sector growth is limited by the absence of economies of scale and further hampered by lack of know-how as well as companies’ limited ability to obtain loans from commercial banks. As they grow many small companies also need support for putting in place proper managerial and corporate governance structures. The EBRD has a wealth of experience in such assistance across its countries of operations and is looking forward to offering this expertise also to Turkish Cypriot businesses.

The EBRD’s Advice for Small Businesses programme serves to make local SMEs more competitive in a globalising economy and assist with the introduction of new and diverse products and processes. The programme provides SMEs with direct assistance by experienced business advisers and local consultants, helping them to adapt to the demands of a modern market economy.

Libor Krkoška, EBRD Head of Office in Nicosia, said: “With this programme we aim to help local SMEs to improve their performance and growth and to help them prepare for the reunification of the island to be ready to compete in the European Union’s Single Market.

“The start of SME advisory services for the Turkish Cypriot community was initially funded by the EBRD Shareholder Special Fund. This will now be taken over by the EU which will fund advisory services and technical assistance for the local banks with €1.65 million. This will be complemented with up to €25 million in SME financing funded by the EBRD,” Mr Krkoška added.

Michela Foresti, Head of Programme Team of the EU Programme Support Office to the Turkish Cypriot Community, said: “With economic development a central theme of the EU-funded Aid Programme for the Turkish Cypriot community, support to the private sector is an essential element of it. Over the 10 years of operations of the Aid Programme in the northern part of Cyprus, the EU provided financial support to the private sector to the tune of €19 million, and of over €30 million when considering also the private sector in the rural economy. Typically this support was delivered in the form of technical assistance for advisory services, to enhance local capacities and embrace EC standards, as well as grant support.  

“The EU welcomes the opportunity for a new mechanism to support the private sector in the northern part of Cyprus by way of the EBRD Advice for Small Businesses programme that combines access to finance with the provision of know-how and advice and therefore allocated €1.65 million for the ‘know-how’ component of the mechanism, for a period of four years. We are convinced that the new facility will address the needs of small businesses in the Turkish Cypriot community to obtain longer-term financing and to access high-quality advisory services that will help improve their management performance, increase their management effectiveness and reduce costs.”

Ali Çıralı, President of the Cyprus Turkish Chamber of Industry, underlined the need for Turkish Cypriot enterprises to become more competitive and able to work in open markets, especially in view of the progressing negotiations about the reunification of the island.

Fikri Toros, President of the Turkish Cypriot Chamber of Commerce, said: “We are convinced that all efforts to increase the competitiveness and economic development of the Turkish Cypriot private sector directly contribute to the ongoing peace process in Cyprus. It is critical to have such contributions in order go through the transition periods in a stable manner. ”

With the funds provided by the EBRD and the EU our SMEs will not only have the chance to develop their institutional capacities but they will also work with experienced business consultants. We believe that such opportunities will also contribute to the reconciliation process by helping the compliance procedures of the Turkish Cypriot economy,” Mr Toros added.

The EBRD’s Advice for Small Businesses activity in the Turkish Cypriot community is funded by the European Union for a period of four years. The EBRD has successfully provided business advice to SMEs for more than 20 years, committing over €230 million of donor funds to assist nearly 14,000 small and medium-sized enterprises in more than 30 countries. The vast majority of companies that have benefited from the programme experienced an increase in their turnover and productivity, whereas results are equally impressive as far as job creation and access to external finance are concerned.

For further information about the programme please contact: knowhowcyprus@ebrd.com.

Information about the EBRD’s activities in Cyprus is also available at http://www.ebrd.com/ebrd-in-cyprus.html, while information about EBRD advisory services is at www.ebrd.com/knowhow/cyprus.