THE first batch of issuance under a “minibond” program that the Athens Exchange Group (Athex) has been promoting to finance Greek SMEs is set for launch after the summer break.

    Greece’s economic recovery is closely linked with the health of its SMEs, which make up 99.9 percent of its companies and employ 85 percent of the workforce compared with an EU-wide average of 66.4 percent, according to PwC. But these firms have increasingly found themselves starved of financing from the country’s creaking banks.

    Athex is keeping its project to boost SME lending simple to start with, allowing companies to issue 5 million euros (US$6.5 million) of bonds through the ENA STEP (support the entrepreneur) part of its alternative market listings.

    “We expect the first issues in September,” said Nikolaos Porfyris, deputy COO of Athex.

    “SMEs are one of the most important sources of growth for the economy, but there is a funding gap of around 12 billion euros to 16 billion euros. There are some companies that are in good shape, despite the macro situation, that want to expand but lending is difficult due to the bank deleveraging — and expensive,” said Porfyris.

    Greek SMEs have been hard hit by the lending drought due to an unprecedented 30 percent nonperforming loan ratio in the country’s banking system, which accounts for over 95 percent of SME lending in the country, according to a recent Oliver Wyman report.

    The ECB’s Survey on Access to Finance of Small and Medium-Sized Enterprises canvassed 500 Greek SMEs between October 2013 and April 2014, showing 42 percent expressing access to finance as their most pressing concern.

    A fifth of firms admitted they had given up even applying for a loan, while only 33 percent of applications were successful (often with reduced loan amounts) versus 61 percent in Spain and 57 percent in Italy.

    (SD-Agencies)