The Council of Ministers approved on Tuesday a proposal from the Minister of Finance to establish a national development agency. The agency is expected to be operational by late 2025 to early 2026, initiating substantial funding efforts.

Finance Minister Makis Keravnos, speaking after the Cabinet meeting, stated that Cyprus is the only EU country without such an agency. A study was commissioned specifically for its establishment.

This study, delivered this month and approved today, outlines the agency's mission to enhance state initiatives that improve access to financing for SMEs, startups, and the self-employed. "It specifically aims to fill gaps in business financing," Keravnos said, adding that the study is part of the resilience and recovery plan tied to the milestone of the fourth disbursement due in June 2024.

According to Keravnos, beyond state funding, financial partners will include the European Investment Bank and the European Investment Fund. The state is expected to contribute €107 million in the first five years of the agency’s operation.

"The agency's goal is not profit maximization but to serve a broader purpose for the Cypriot economy by boosting the competitiveness of SMEs," Keravnos remarked.

He mentioned that the proposed financing tools would involve small loan amounts and guarantees from the EIB, facilitated through banks. Thus, he emphasized, there would be no impact on public debt from the agency's activities.