EUR 100 million for crediting of SMEs in Serbia from WB EDIF Guarantee Facility – Agreements with selected banks to be signed in October 2018

A total of EUR 650 million is provided through the WB EDIF Guarantee Facility for small and medium enterprises in this area, and all the funds, guarantee facilities and technical support programs within it are also available to companies from Serbia. The guarantee facility of EUR 20 million is especially important for local companies, a special window for Serbia, which will provide credits of over EUR 100 million.

As eKapija learns at the Ministry of Economy, the selection of banks for this Guarantee Facility is in progress.

– The signing of the agreement is expected in October – the ministry says.

– EUR 20 million is provided for credit guarantees from the EU pre-accession funds, within the EU for Serbia – Financing for SMEs project, and the aim is for a favorable support to new investments in the amount of over EUR 100 million to be provided through the effects of these guarantees. The project will thereby enable micro, small and medium enterprises to apply for more favorable credits.

As the ministry explains, there are two funds within the EDIF program from which companies can get funds in the form of investments in company capital: ENIF for the financing of venture capitals meant for innovative SMEs in the early stages of development, and ENEF, which focuses on the already established SMEs which have a high potential for growth. Furthermore, they remind, EDIF provides guarantees to banks which credit innovative SMEs, and companies in various stages of development (beginners, developed companies) and of various sizes and activities, may apply for more favorable credits. Companies can also use the advisory support of foreign and local experts, provided by the EBRD.

The company BG Reklam has been using all the advantages of the EDIF Program since 2015, primarily the advisory help, says Luka Stanic of this Belgrade-based company.

– First, we were provided with help from local consultants who carried out a set of training courses for the sales team, which has considerably improved the knowledge and the skills in BG Reklam. After that, we used the grant related to foreign consultants and an improvement of efficiency in production and then we came to the financing and renovated our technology and refinanced old credits together with a commercial bank – Stanic points out and adds that the company’s progress is now seen in the increase in the employment, from 46 to 175 workers, and in the production and the export of 70%.

This program was presented at the Business Forum WB EDIF 2018, held this Tuesday, June 26, 2018, at the Chamber of Commerce of Serbia (CCIS) in Belgrade. As the president of the CCIS, Marko Cadez, said on this occasion, the gap between the supply and the demand when it comes to credits is big, and the standard bank offer in the region is inadequate for small and medium enterprises, as it is “accompanied with high interest rates, expensive and complicated procedures, collaterals and long-term credit expenses”.

– The EIB estimates that Serbia alone lacks a billion euros for the financing of the SME sector, primarily for medium- and long-term credits – Cadez said and announced that Serbia would also get a new legal framework in the second half of 2018, regulating the investments for investors when it comes to investing in innovative companies and the connecting of innovative companies with big systems.

It was said at this event that, together with the help of EUR 275 million – EUR 150 million from European funds and EUR 125 million from international financial institutions – EDIF had provided a total of EUR 650 million in five years, enabling investments in nearly 5,000 SMEs in the Western Balkans.

According to the data of the Ministry of Economy, 406 SMEs have been financed through this program so far, and the total financing amounts to close to EUR 62 million.

EDIF is primarily financed from EU funds, that is, IPA funds meant for the Western Balkans. These funds are provided through financial instruments and programs of EDIF, run by the EIF, the EBRD, the EIB, the World Bank, OECD and bilateral donors.

J.S.