By Olga Rosca
Small businesses in Serbia will benefit from a financing package provided by the European Bank for Reconstruction and Development (EBRD) to Erste Bank Serbia (EBS) as the country seeks to recover from the coronavirus pandemic.
The EBRD financing will consist of a loan of up to €40 million(US$44.94million) and a second loan of up to RSD 2.2 billion or around €20 million equivalent for on-lending to local small and medium-sized enterprises (SMEs), especially in remote parts of the country. The provision of local currency funding will protect borrowers from exposure to exchange rate risks.
Serbia’s SME sector is one of the pillars of the national economy, accounting for 66 per cent of the country’s employment and 57 per cent of value added. Erste Bank Serbia reiterated its commitment to the segment after the outbreak of the Covid-19 crisis. Meanwhile, the EBRD approved two Solidarity Packages to combat the economic impact of the pandemic and now expects to invest up to €21 billion in the period 2020-21 to support the recovery.
EBRD Regional Director, Western Balkans and Head of Serbia, Zsuzsanna Hargitai said: “Today we are joining forces with our longstanding partner Erste Bank Serbia to support small businesses in the country. We share the view, the vision and the determination to overcome this unprecedented challenge and make sure viable enterprises will be able to overcome the recent shock and return to growth.”
President of the Executive Board, Erste Bank Serbia, Slavko Carić added: “At this moment, it is especially important to provide support for SMEs to advance or preserve their operations through financing their activities and needs, whether they are related to investments, working capital or liquidity. With particular pleasure we are continuing our fruitful, long-standing cooperation with the EBRD. It allows us to support this very important segment of Serbian economy under competitive conditions.”
Erste Bank Serbia is a systemically important bank in the country and a fully owned subsidiary of Erste Bank Group. The bank has identified servicing the SME sector as a strategic target for creating sustainable growth.
The EBRD is a leading institutional investor in Serbia. The Bank has invested more than €6.0 billion across 267 projects in the country to date. The EBRD is focusing on support for private-sector development, improvement of public utility services and on the overall transition towards a green economy.