The government is trying to create a more competitive environment for the banks so that financing is made available towards other directions.
In reply to a question raised by “Naftemporiki”, during the press conference in the Thessaloniki International Fair (TIF), Prime Minister Kyriakos Mitsotakis revealed the relevant plans.
Strengthening the secondary financing market includes a roadmap to enable the granting of loans to businesses and individuals who do not have access to the country’s financial system.
More specifically, companies are starting to finance the repayment of bad loans that borrowers will be able to buy with a significant haircut after negotiating with the servicers. The idea is not new and has been sufficiently analyzed throughout the previous period of time, with “Naftemporiki” being the first to highlight the issue in December 2022. But, the issue has now matured and will also strengthen the code of conduct of the funds in the next period of time.
The road map
More specifically, specialized funds will offer liquidity to borrowers who wish to proceed with debt settlement, but do not have the required liquidity to do so. The specific tool will be called Discounted Pay Off (DPO) and through it the borrower will be able to pay off his debt to the servicer with a loan from the fund, achieving a strong haircut.
This tool will be addressed to individuals and businesses with bad loans that are connected or have the possibility to be connected to collaterals. These collaterals will either concern already existing loan mortgages that are non-performing, or other, new ones, if this is deemed necessary.