Since 2010 Europe has introduced the European Microfinancing Mechanism “Progress”. This Mechanism enables selected microfinance providers in the EU to increase their lending by taking the following steps: by providing guarantees to microfinance providers (and therefore jointly assume the risk of loss), and by financing the increase of amounts available for micro-loans.<\/p>\n\n\n\n
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Since the first of July 2020, the\nworld established microfinancing concept has been voted in the Greek Parliament\nas the 4701\/2020 law, and the framework for granting short loans will have been\nconfigured during the fall, and by the end of 2020, is expected that the\nmicrofinancing will commence, in the Greek market.<\/p>\n\n\n\n
What is microfinancing?<\/strong><\/p>\n\n\n\n The microfinancing notion refers to\na credit of 25,000 euros, and the purpose of the newly introduced law is to form\nthe regulations referring to the rights and obligations of micro-funding\ncorporations as well as of the beneficiaries, along with any transparency\nissues that may arise during the process.<\/p>\n\n\n\n Microfinancing institutions and beneficiaries.<\/strong><\/p>\n\n\n\n According to Greek law,\nmicrofinancing institutions that are established in Greece can participate in\nthe procedure after acquiring an operating license issued by the Bank of\nGreece. The decision on a micro-financing license is granted three months after\nthe submission of the supporting documents and any necessary supplements.\nMoreover, the initial capital that they are obliged to deposit in the Bank of\nGreece was set at 250,000 euros.<\/p>\n\n\n\n On the other hand, microfinancing\nbeneficiaries are very small entities, individuals engaged in individual\nbusiness activity and Institutions of Social and Solidarity Economy,\nindividuals belonging to socially vulnerable groups with at least ten years of\ntax residence in Greece, beneficiaries of public policy implementation\nprograms, as well as individuals with the purpose to cover expenses related,\ndirectly or indirectly, to their education or training or apprenticeship.<\/p>\n\n\n\n Licensing requirements<\/strong><\/p>\n\n\n\n For the Bank of Greece to license\nthe constitution, there must be a submission including the following\ninformation about the interested corporation: Articles of Association, data\nreferring to the company\u2019s identity, its participants, the corporation\u2019s\nactivity and inside organization, its credit risk management, its establishment\nand branches (in Greece or else), its Information Systems, etc. Beyond the\nabove, any other necessary supporting documents are specified in each separate\ncase by the Bank of Greece.<\/p>\n\n\n\n The assessment will be also based\nupon the corporation\u2019s reputation, robustness, the ability of compliance with\nthe existing regulations, and reliability in general.<\/p>\n\n\n\n What kind of microcredit is provided to be granted by law?<\/strong><\/p>\n\n\n\n Microfinance institutions may grant\nmicro-credits as follows: all forms of credit up to twenty-five thousand\n(25,000) euros, either to cover investment needs or as working capital, leasing\nproducts up to twenty-five thousand (25,000) euros for the acquisition of\nequipment, stand-alone guarantees of up to twenty-five thousand (25,000) euros,\nwhich must not be used to obtain credit from other financial institutions,\nappropriations aimed at strengthening public policies or the social and\neconomic integration of socially vulnerable groups, up to twenty-five thousand\n(25,000) euros, and which concern, in particular, the due to their own will.<\/p>\n\n\n\n The repayment must be delivered in a\nperiod of 12 months to 10 years and the interest rate will be adjusted by the\ndecision of the Minister of Finance. <\/p>\n\n\n\n Microfinancing benefits for the Greek market<\/strong><\/p>\n\n\n\n There are several\nstudies on the financing gap in the market, ie which companies can not get\nloans (and therefore could benefit from microcredit). As for how much money\ncould be channeled in total to the Greek market, the Undersecretary of Finance\nhas explained that he considers it realistic to allocate about 150 million\neuros per year for small loans. Investors will certainly enter microfinancing\nby claiming licenses. Especially, the new landscape formed after the pandemic\ncrisis could be covered by microfinancing, reducing the existing funding gap.\nGiven that in microfinancing there is no collateral, a relatively high interest\nrate that will fluctuate at 11%, is expected, <\/p>\n\n\n\n Our law firm is following the\ndevelopments concerning this institutional framework following a relevant case\nassigned to it and is available for any consulting or guidance concerning\nmicrofinancing and the newly established Greek law.<\/p>\n\n\n\n The information provided on this article does Since 2010 Europe has introduced the European Microfinancing Mechanism “Progress”. This Mechanism enables selected microfinance providers in the EU to […]<\/p>\n","protected":false},"author":6,"featured_media":2183,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-nea"],"acf":[],"_links":{"self":[{"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/posts\/2114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/comments?post=2114"}],"version-history":[{"count":1,"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/posts\/2114\/revisions"}],"predecessor-version":[{"id":2116,"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/posts\/2114\/revisions\/2116"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/media\/2183"}],"wp:attachment":[{"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/media?parent=2114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/categories?post=2114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nexuslaw.gr\/en\/wp-json\/wp\/v2\/tags?post=2114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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