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The Cyprus Entrepreneurship Fund (CYPEF)

    Date: 25 February 2014 - 31 December 2024


CYPEF is a fund established by the Republic of Cyprus (RoC) to support and strengthen entrepreneurship in the country by enhancing access to finance to small and medium-sized enterprises (SMEs). Amounts dedicated from the Cypriot government to CYPEF are made available through financing from the European Investment Bank (EIB).

CYPEF is managed by the European Investment Fund (EIF). The initial EUR 70 million of capital provided by the Cypriot Government for phase 1 of the CYPEF initiative has been matched through equal contributions from the EIF and its selected financial intermediaries, translating into c. EUR 140 million of finance to the benefit of Cypriot SMEs.

In June 2021, the Republic of Cyprus and the EIF signed the continuation of the CYPEF initiative, under a new phase (phase II). An additional contribution of EUR 200 million of capital, funded by the RoC, will provide the necessary funding for financing new investment needs of SMEs and midcaps, while meeting the financial challenges caused by the COVID-19 crisis. The two phases together are expected to create a substantial portfolio of c. EUR 540 million. 

CYPEF’s financial instruments are deployed by local banks selected by the EIF following Calls for Expression of Interest (CEoI). These financial intermediaries make available CYPEF’s financing to eligible SMEs at favourable terms, in the form of reduced interest rates, reduced collateral requirements, extended loan maturities, and grace periods.

What kind of enterprises and financing needs does CYPEF support?

CYPEF benefits enterprises (small, medium and mid-caps) based in Cyprus [i] as well as self-employed entrepreneurs registered under the Cyprus social insurance scheme operating in the majority of economic sectors [ii]. Any economic activity financed under CYPEF needs to be performed within the area effectively controlled by the Cypriot Government [iii]. CYPEF’s financial products can support both working capital and investment loans.

Are you a bank interested in becoming a CYPEF financial intermediary?

Interested banks wishing to become CYPEF financial intermediaries need to express their interest in accordance with the terms and conditions published in the call for expression of interest launched by EIF (to be published during Q3 2021). Expressions of interest will be evaluated by taking into account pre-determined selection criteria, such as:

  • Origination capacity of the applicant and ability to timely deploy the requested amounts;
  • Proposed funding conditions for the SMEs/mid-caps (e.g. pricing and collateral terms) in order to offer attractive terms to the benefiting SMEs/mid-caps;
  • Overall credit standing and quality of loan portfolio of the applicant.

What type of financial instruments is the CYPEF expected to implement?

CYPEF will initially offer a ‘funded risk-sharing loan product', providing to selected financial intermediaries funds at attractive cost to on-lend to SMEs and sharing the underlying risk for each individual SME loan. Other products, such as portfolio guarantees may be offered at a later stage, in line with market needs.

A portion of CYPEF’s funds is earmarked to finance existing loans under a specific eligibility framework. Loan re-financing is strictly allowed for economically viable SMEs and aims at improving their financing conditions and strengthening their liquidity position and cash flows.

How to apply to CYPEF

For banks and financial institutions: 

Find here the new call for expression of interest under CYPEF (phase 2). The deadline for applications by eligible financial intermediaries is 31 December 2024 (date of receipt by the EIF). Please consult the call documentation for further details and eligibility criteria.

Call for Expression of Interest
Annex I - Expression of Interest
Annex II - Indicative Term Sheet
Annex III - DD Information Requirements
Annex IV - Terms of Confidentiality
Data - Information Requested
CYPEF II – EIB Side Letter
NACE Code List_EU_01.07.2020

The EIF selects financial intermediaries based on standard assessment process including, among others, due diligence. For further questions related to the application, please contact: info.cypef@eif.org

For SMEs and self-employed entrepreneurs:

Detailed information with regards to eligibility and financing terms can be obtained from CYPEF’s financial intermediaries, which are solely responsible for receiving and evaluating loan applications and subsequently disbursing and monitoring the SME loans. Evaluation of a loan request is performed by the CYPEF financial intermediaries according to their internal rules and procedures. EIF exercises a supervisory and monitoring role over all CYPEF financial intermediaries. For a list of the financial intermediaries currently cooperating with in Cyprus please visit http://www.eif.org/what_we_do/where/cy/index.htm. Please contact the intermediary directly to find out about eligibility criteria and financial conditions. For information about finance available under further EU initiatives, please visit the  http://www.access-to-finance.eu

[i] In principle, eligible entities are autonomous, small, medium, and mid-cap sized enterprises (“SMEs and mid-caps”) up to 3,000 employees. However, agreements with some banks may have a special focus and to this extent eligibility of a potential beneficiary should always be enquired directly with CYPEF’s financial intermediaries.

[ii] Sector eligibility should always be enquired directly with CYPEF’s financial intermediaries as some of them might have a specific focus. Economic sectors/activities that are not eligible for CYPEF financing include inter alia the following: weapons and arms, gambling, tobacco, pure real estate development activity, pure financial activities (e.g. trading in financial instruments). For more information please revert to CYPEF’s financial intermediaries. Financing the purchase / construction or renovation of real estate with the purpose of selling or renting the building to a third party (i.e. not part of the same group of companies) is excluded from CYPEF support. Financing the purchase of assets other than real estate (e.g. construction equipment), with the purpose of renting them to third parties, is however eligible.

[iii] According to the Protocol 10 of the Accession Treaty of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic to the European Union, the application of Community Acquis shall be suspended in those areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control.  In addition, according to the Protocol 3 of the above mentioned Treaty, the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland, in Cyprus, are not included in the eligible areas.

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