As Novac writes on the 29th of May, 2020, the Ministry of Agriculture and HBOR have prepared a new financial instrument called ”working capital for rural development”, for which 130 million kuna has been provided, and loans will be approved directly by HBOR, with an interest rate of 0.5 percent, while users will be exempt from having to pay all fees.
This is a new programme for lending liquidity to farmers and processors of agricultural products and entities operating in the forestry sector whose business is being negatively affected by the ongoing coronavirus pandemic, the Ministry of Agriculture and the Croatian Bank for Reconstruction and Development (HBOR) point out in their separate statements.
These loans will be approved directly by HBOR at a welcome interest rate of 0.5 percent, and loan users are exempt from needing to pay all fees normally charged upon approval (for example, fees for processing a loan application, for reserving funds, etc) as well as fees for the alteration of credit conditions, including early loan repayment fees.
Loan applications will be able to be submitted to HBOR as of Monday, June the 1st, 2020. The minimum loan amount stands at 190,000 kuna and the maximum is 1.52 million kuna.
These funds are approved for a period of up to five years (including a grace period of up to twelve months), or up to three years (including a grace period of up to six months) for loans in the amount of 760 thousand kuna or less.
The Ministry of Agriculture has pointed out that this new instrument will provide liquidity in the agricultural production, processing and forestry sectors in the short term, and also work to further encourage recovery after the public health crisis caused by the COVID-19 pandemic.
The funds will be able to be used to finance employee salaries, overheads and other basic operating costs, the procurement of raw materials and the settlement of liabilities to suppliers and other current operating costs. The funds cannot be used to settle existing credit obligations to commercial banks and other financial institutions, HBOR noted.
The total amount of funds intended for these loans amounts to the aforementioned 130 million kuna, and is provided by the conversion of part of another financial instrument called “investment loans for rural development” into the new financial instrument called ”working capital for rural development”.
Loan applications will be being received until December the 31st, 2020, or until the total amount of available funds are used up, according to a statement from the competent ministry and from HBOR.
For more, follow our business page.
