Serbian banks are preparing an offer to their customers for liquidity loans to businesses threatened by the epidemic. The loans will be approved for a period of 36 months, a grace period of nine to 12 months.
Small and medium-sized enterprises, entrepreneurs and registered farms can count on favorable loans for the liquidity of their businesses. Pursuant to the Decree on the Guarantee Scheme adopted by the Government of Serbia, banks will provide funds to finance the liquidity and working capital of Serbian companies in the amount of two billion euros. And as we were confirmed by the Association of Banks of Serbia, banks are ready, they have begun to contact their clients.
According to the Association of Banks of Serbia, loans from the Guarantee Scheme will be approved for a period of 36 months, which includes a grace period of nine to 12 months. Clients can receive a loan up to a quarter of their annual revenue for 2019, up to a maximum of three million euros. Loans can be used in dinars or in euros, with favorable interest rates of 1 m belibor, plus two and a half percent for a loan in dinars, or 3 m euribor plus three percent for a loan in euros. In addition, the banking sector has approved a moratorium on debt repayments, giving citizens and businesses two billion euros in support.
– The banking sector is fully supportive of the Serbian economy for overcoming the difficulties caused by the crisis of the COVID 19 – says Vladimir Vasic, General Manager of UBS. – Banks share the fate of citizens and economy and fully support the activities of the NBS and the Government of Serbia to reduce the effects of the crisis and overcome it as quickly as possible. Our goal is to preserve the liquidity of business entities, as soon as possible, to emerge from the crisis and grow rapidly next year, which we expect to be able to reach the forecast of 7.1 percent.
According to UBS, banks are ready to realize these loans as soon as possible. And they add that clients targeted by this program who are interested in using a state-guaranteed loan can contact their bank for further information on the conditions and documentation for applying.
– This is an excellent program and we are fully ready to support all clients by applying economic measures and regulations of the Serbian Government aimed at mitigating the economic consequences due to COVID 19 – they say in the Credit Agricole Bank. – Liquidity loans have received a lot of interest from most clients. The product itself is designed to help boost the economy, overcome the current situation, and what’s most important right now – it will serve to increase liquidity.
According to the Employers Union of Serbia (UPS) and the Association of Small and Medium Enterprises (AMSP), they hope that all banks will indeed offer favorable conditions and will not insist on the principles on which they otherwise operate.
– Any help is welcome, especially the one related to liquidity – says Zoran Vujovic of AMSP.
– All entrepreneurs had to pay debts, utilities, salaries, rents during a state of emergency, so such assistance will be significant. Especially since the state will now be the guarantor for the loans.
Nebojsa Atanackovic, UPS president, welcomes lending to companies to get out of the crisis as a measure, but fears that not all banks will set the same conditions:
– All banks should put the same conditions and really make these loans favorable. It is great that there is such a possibility, but I do not know how many businessmen will be ready to borrow, and I believe that many will try to avoid it.
– Many entrepreneurs have accepted the right to a three-month moratorium, a break in repayment of many obligations to banks, and even when it comes to loans, there is a grace period in repayment. I am afraid that at one point there will be too many obligations at once when the time comes for payment – says Nebojsa Atanackovic. – Business owners will need to think carefully and evaluate how much they can borrow, regardless of the affordability of the banking product.
The state should also consider putting some of the burden at the expense of public companies, because it is not fair that the brunt of the crisis is borne by the private sector – says Zoran Vujovic. – Only the police, health and military should be excluded, and I see no reason for municipal officials, boards of directors and others to remain intact while the private sector, which is filling the budget, is the only one suffering, Novosti reports.
