Croatian Small Businesses to Receive 220 Million Euros in Affordable Loans

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Ministry of Regional Development and EU Funds and the Croatian Bank for Reconstruction and Development sign an important agreement.

Ministry of Regional Development and EU Funds and the Croatian Bank for Reconstruction and Development (HBOR) signed on Wednesday an agreement on funding the implementation of the financial instrument “ESIF Loans for Growth and Development”, which will be financed with 110 million euros from EU funds. Once the funds from commercial banks are added, entrepreneurs will have access to the total of 220 million euros, reports Jutarnji List on December 21, 2016.

The contract was signed by Minister of Regional Development and EU Funds Gabrijela Žalac and CEO of HBOR Dušan Tomašević.

The new financial instrument is intended for micro, small and medium-sized enterprises at the stage of growth and development, and HBOR expects that the programme will provide support for at least 200 small and medium-sized enterprises and help create at least 800 new jobs. Financial instruments are co-financed under the European Structural and Investment Funds (ESIF) programme and come in the form of credit lines, guarantee schemes and venture capital funds. Entrepreneurs will be able to receive long-term investment loans with a repayment period of 12 years, with affordable interest rates.

Minister Žalac said she expected that the interest rate would amount to 2-4 percent for end users, adding that funds would be paid to businesses in mid-2017.

Financial instruments provide for a new and easier access to EU funds due to significantly lower administrative requirements and entrepreneurs can more quickly get the loans at interest rates far lower than conventional loans offered by commercial banks. The funds can be used for initial funding, investments in land and buildings, equipment and devices, as well as for other activities, explained the Minister.

The minimum loan amount is 100,000 euros in the kuna, and the highest amount is 3 million euros. The exception is tourism sector where the highest amount can be up to 10 million euros. Repayment period is up to 12 years, including a 2-year grace period, while in tourism the repayment period can be up to 17 years, including a 4-year grace period.

“We expect to achieve a major success with this financial product and to attract great interest of entrepreneurs, and that at least 800 new jobs will be opened thanks to this programme”, said Marina Jus, member of the HBOR board of directors.

Tomašević said that HBOR had for years successfully cooperated with all relevant stakeholders in promoting the absorption of EU funds. “To date we have funded nearly 600 projects totalling in excess of 3 billion kuna”, said Tomašević.


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