Duarte Freitas announces opening of applications for Azores Participatory Capital

Secretaria Regional das Finanças, Planeamento e Administração Pública

The Opening Notice for the financial instrument created under the RRP component "Recapitalising the Business System of the Azores" was launched today.

According to the Regional Secretary for Finance, Planning and Public Administration, Duarte Freitas, this is an "innovative financial instrument that was created in conjunction with Banco Português de Fomento (investment bank) and in dialogue with retail banking, based on the legal framework for equity loans."

This instrument is specifically aimed at small and medium-sized enterprises. It will allow them to access the Capitalisation Fund for Azorean Companies in a simple and expeditious manner, without the need to resort to specialised financial consultancy services.

For the government official, this is an important step towards the "consolidation of the regional business fabric and the implementation of a system that allows companies to strengthen their capacity to access the new incentive system by promoting their capitalisation under favourable and foreseeable conditions - this instrument is made available at a flat-rate remuneration throughout its maturity, ranging from 1.5% to 3%, depending on the applicants' rating."

In addition to being recognised as company equity rather than as a liability, these conditions also ensure substantially lower financial charges than those currently applied to loans.

The programme launched today is intended to be widely adopted by regional entrepreneurs as it simplifies the concept, uses a well-known interlocutor (the commercial bank) and draws on its wide network of branch offices throughout the archipelago.

The opening notice launched today marks the beginning of the accreditation of banks with Banco de Fomento. Following this phase, banks will be responsible for implementing the necessary procedures for receiving applications through their branch office network, examining the files with Banco de Fomento, validating them and signing the contracts.

The legal framework for participatory loans was defined by Decree-Law 11/2022 of January 12 and has not yet been implemented in Portugal. However, it is already a common practice in other countries, such as Spain or France.