EIB Group Launches First InvestEU Guarantee in Cyprus to Boost SME Growth

The new initiative will make it significantly easier for Cypriot businesses—especially those that have traditionally struggled to access credit—to secure financing on favorable terms.

The European Investment Bank Group (EIB Group) has announced the launch of the first InvestEU Guarantee transaction in Cyprus, a milestone in extending EU-backed financing to support local businesses. The agreement, signed between the European Investment Fund (EIF) and Eurobank, introduces a loan portfolio guarantee that will unlock up to €62.5 million in new financing for small and medium-sized enterprises (SMEs) and start-ups across the island.

Financing for Growth and Inclusion

The new initiative will make it significantly easier for Cypriot businesses—especially those that have traditionally struggled to access credit—to secure financing on favorable terms. The EU-supported loans will provide:

• Lower collateral requirements, making it possible for viable businesses without sufficient guarantees to access funding.

• Extended repayment periods, giving enterprises the flexibility to invest and grow before having to repay large sums.

• Financing for start-ups, a segment often excluded from traditional bank lending due to higher risk profiles.

By improving access to credit, the InvestEU-backed transaction aims to spur investment, innovation, and job creation, particularly in sectors that are critical for Cyprus’s sustainable growth.

Strong Support from EU Institutions

Kyriakos Kakouris, EIB Vice-President, highlighted the impact of the agreement:

“With this first EIF InvestEU agreement in Cyprus, we are opening new doors for entrepreneurs. Europe is here to make financing simpler, fairer, and more inclusive. SMEs and start-ups across Cyprus will now be better equipped to invest, expand and create jobs, strengthening the local economy and Europe’s competitiveness.”

Marjut Falkstedt, EIF Chief Executive, emphasized the role of the InvestEU programme in reducing barriers to credit:

“The InvestEU programme gives us the tools to make financing more accessible across Europe, and it is great to be able to announce this first agreement in Cyprus. Ultimately, this will mean better financing conditions for Cypriot businesses, and in particular start-ups, with all the knock-on effect that can have on the economy.”

Part of the InvestEU Programme

The InvestEU Programme is the European Union’s flagship financing instrument for mobilizing investment in areas that support Europe’s long-term policy priorities, including innovation, digitalization, sustainability, and SME competitiveness. Backed by an EU budget guarantee of €26.2 billion, InvestEU is expected to mobilize over €372 billion in additional investment by 2027 across the European Union.

The new Cyprus initiative underscores how the programme can be tailored to national markets, providing financing solutions where access to capital remains a constraint for businesses.

Boosting Cyprus’s Economic Resilience

SMEs represent the backbone of the Cypriot economy, making up over 95% of businesses and employing the majority of the workforce. However, many face persistent financing challenges, particularly new ventures in tech, green industries, and digital services.

By unlocking more than €62.5 million in fresh loans, the InvestEU-backed guarantee will help address these financing gaps, support innovation-driven sectors, and enhance Cyprus’s economic resilience in the face of global and regional challenges.

Looking Ahead

This first InvestEU Guarantee transaction in Cyprus reflects the EU’s commitment to ensuring that every member state benefits from Europe-wide financial instruments. It also highlights the growing role of the EIB Group in supporting entrepreneurship, competitiveness, and sustainable growth across the region.

For Cypriot entrepreneurs, the agreement marks a turning point—transforming access to capital from a barrier into a catalyst for innovation and opportunity.