European Union funds worth billions of euros and allocated to help small and medium-sized enterprises in Eastern Europe recover from the global economic crisis have been hoarded by third-party and intermediary banks, a Prague-based transparency campaign group has claimed.
Following the economic crisis of 2008, EU finance ministers introduced a euro15 billion (USD19.9 billion) stimulus package for SMEs in Eastern Europe. The European Investment Bank provided the loans to third-party banks for on-lending to small businesses, the EUobserver explains.
“Many intermediaries appear to be making very few allocations to SMEs despite the fact that they have often received the entire global loan amount and have had, in some instances, over two years to find SME beneficiaries,” a report by BankWatch said, according to the EUobserver.
The BankWatch report examined the lending process in Hungary, Poland, Slovakia and the Czech Republic from 2008 to June 2010. EUobserver says the report found that only 0.001 percent of SMEs in Eastern Europe had received any form of loan allocations from the intermediary banks chosen to deliver the EU funds.
