ZAGREB, November 1, 2018 - The Croatian agency for small entrepreneurship, innovation and investment – HAMAG-BICRO – and seven financial institutions on Wednesday signed an agreement on cooperation in the implementation of the ESIF Capped Portfolio Guarantee financial instrument, intended for small business companies. The total amount of potential loans is 557 million euro.
By signing the agreement, the financial institutions have undertaken to create with their own funds a loan and leasing portfolio worth 557 million euro for small businesses, while HAMAG-BICRO will provide coverage for the institutions' losses of up to 25% of the loan portfolio, for which there is an allocation worth 58 million euro.
The European Structural and Investment Funds (ESIF) Capped Portfolio Guarantee is a financial instrument that is being introduced on the Croatian financial market for the first time and it is intended for micro, small and medium businesses which can seek investment and working capital loans from the financial institutions which are signatories to the agreement with HAMAG-BICRO.
The ESIF Capped Portfolio Guarantee can amount to 150,000 euro with a maximum guarantee rate of 80%. It is granted for a period of one to ten years per individual loan or leasing from the portfolio. The financial instrument is intended to make loans and other credit forms more available to small businesses, to lower interest rates and the insurance instruments sought, increase employment and increase private investments.
Economy Minister Darko Horvat said that a project similar to the one introduced today had been introduced at the Croatian Bank for Reconstruction and Development (HBOR). "The ministry will ensure EU funds and give HBOR the opportunity to create a credit line for micro, small and medium businesses with an additional 414 million kuna," Horvat said.
Regional Development and EU Funds Minister Gabrijela Žalac told representatives of the banking industry that everyone had to work faster on absorbing EU funds for the business sector. The five financial instruments made available so far have secured 180 million euro for financial support to small and medium businesses, Žalac said.
Speaking of the instrument introduced yesterday, she said that 28 million euro was a contribution from ESIF while the national contribution amounted to 30 million euro.
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