The government will provide RSD 1 billion in loans under good conditions to micro, small and medium companies heavily hit by the recent floods, in order to restart their production, Minister of Economy Dusan Vujovic said on Saturday.
The Development Fund will grant the loans, he told Tanjug, adding that the payment deadline would be up to 7 years, the interest would be 1.5 percent per year and that payment would start one year after the loan had been granted.
Between 60 and 70 percent of the funds in such loans in non-repayable, he noted.
The government decision to allocate RSD 1 billion from the budget for those loans was preceded by an inspection by a team from the ministries of economy and finance, Serbia Investment and Export Promotion Agency, Development Fund and Privatisation Agency, which interviewed companies to find out the extent of the damage, Vujovic stated.
“Based on that, we estimated that RSD 1 billion would be enough to restart the devastated economy of Obrenovac and other municipalities hit by the floods,” he said, adding that medium, small and micro companies could not restart their production without help.
The Development Fund will receive applications for the loans, while the Ministry of Economy will monitor the procedure and decide whether the applications are justified by analysing each company’s business and scale of damage suffered.
“We think the funds will be enough to get those companies going. Should more be required, we are going to ask for more funds from the government,” Vujovic explained.
The effect on employment will be significant, he pointed out.
“Our recommendation to banks is to accommodate their clients and offer similar payment deadlines for loans already granted. The banks need to show understanding, because a true refinancing would require them to re-evaluate the collateral, and in some cases that collateral no longer exists,” the minister remarked.
“We have increased control over how those funds are distributed and used in both cases. The spending of those funds will be monitored closely,” he stressed.
Source SerbGov
