For every euro of inflows into the Hellenic Development Bank, 3.85 euros are generated through leverage, and financing businesses and households with 11.5 billion euros over the period 2019-2025 had a total impact of 12.5 billion euros on the Greek economy, according to the report by the Foundation for Economic and Industrial Research.
The significant element, also, as Chief Executive Officer Ms. Ismini Papakyrillou notes to Bankingnews, is that European funds returning through loan interest and capital become national funds and can finance new projects.
Alternate Minister of Economy Mr. Nikos Papathanasis asserted that the country, despite being questioned domestically and abroad, completed the targets of the Recovery and Resilience Facility, resulting in the absorption of 36 billion euros corresponding to 16% of GDP.
As he added, more than 600 thousand jobs were created through investments, unemployment decreased to 7.4%, while foreign direct investment rose to 18% from 10.5%, trailing the European average by three percentage points.
He stated that through the Hellenic Development Bank, loans totaling 13 billion euros have been granted to 46 thousand enterprises, of which 77% of beneficiaries had a turnover of up to 2 million euros and 72% up to 10 employees, while through guarantee programs, the perimeter of companies gaining access to banks is continuously expanding.
Regarding the remaining funds from the Recovery and Resilience Facility, amounting to 2 billion euros, these are to be allocated with guarantees of up to 80% alongside loans (50% own participation) and interest rates between 0.35% and 1%.
7 billion euros in incomes and 5 billion euros in taxes
Based on the study by IOBE and the input-output model, the cumulative impact of programs from HDB toward businesses was assessed with a total loan value of 11.5 billion euros on the economy, green transition, and credit market.
For every single euro of resources committed to the financing programs of the bank, 3.58 euros are generated. To that same euro correspond 2.10 euros as worker incomes and 1.43 euros in public revenue, while every 1 million euros of committed resources corresponds to 110 annual jobs.
Cumulatively, over the period 2015-2019, the total impact of HDB amounted to 12.5 billion euros (direct, indirect, and induced) with the creation of 383.6 thousand jobs, 7 billion euros in incomes, and 5 billion euros in public revenue.
A share of 78% of loans was directed to small and medium-sized enterprises, while 60% of the employment impact stems from micro and small enterprises with turnover up to 2 million euros.
Regarding sectors, the largest share of 74% or 8.6 billion euros was directed toward commerce, manufacturing, accommodation, and food services.
From a geographic perspective, 61% relates to Attica and Central Greece, while the impact was high in the South Aegean, the Ionian Islands, and Crete.
As the General Director of IOBE Mr. Nikos Vettas pointed out, «the analysis also shows that the Bank contributed to the credit recovery, that its higher involvement is linked to lower enterprise exit rates during the pandemic, and that its loans carry a lower carbon intensity compared to remaining banks (green loans).»
It is characteristic that in the de-lignitization regions, Kozani and Arcadia, the share of participation by HDB is currently higher than it was prior to the pandemic.
The next step for HDB is the utilization of 1.5 billion euros in new resources that will be leveraged into 5 billion euros of financing toward small and medium-sized enterprises by early 2027, as well as the new Spiti Mou III program amounting to 2 billion euros.
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