Government and the European Investment Fund this morning signed an agreement for the provision of €10 million in funds to be used in support schemes for small and medium enterprises.

The funds will have to be matched by local financial institutions and banks after a call for expressions of interest. SMEs would use their banks as a point of contact to tap into the funds, which should be available by early autumn.

The money comes under the EU’s Jeremie Fund.

The agreement was signed by Finance Minister Tonio Fenech who said there was a potential for the fund to increase if the take up was good.

The Jeremie Fund is particularly aimed at small enterprises which would otherwise find it difficult to raise €25,000 for improving their business.

There will be no conditions on the charges or penalties banks could charge in relation to this financial package. However, the interest margin would have to be commercially reasonable and competitive to be attractive to the borrower.