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The Government of the Republic of Serbia

In the service of citizens

EIB approves €45 million for SMEs development

Belgrade, 11 June 2004

Representatives of the European Investment Bank (EIB) and Serbia-Montenegro signed today an Agreement on a €45 million loan for development of small and medium-sized enterprises (SMEs) and small and medium infrastructure projects.

The Agreement was signed by Serbia-Montenegrin Minister of International Economic Relations Predrag Ivanovic, Governor of the National Bank of Serbia (NBS) Radovan Jelasic, Director General of the EIB Central European Directorate Terence Brown and Director of the EIB Sector for Legal Support for Lending Operations Alfonso Querejeta.

The signing of the Agreement was also attended by Serbian Minister of Finance Mladjan Dinkic and head of the European Commission Belgrade office Geoffrey Barrett, the Tanjug news agency reported.

Dinkic explained that the domestic banks, through which the EIB will approve loans to SMEs and local self-government, have to secure additional €45 million, since the value of the whole arrangement is €90 million. These banks are Komercijalna Banka, Eksim Banka and some other banks that will be chosen by NBS.

The Minister of Finance said that the loans for SMEs will have a 12-year repayment period and a three-year grace period. The fixed and variable annual interest rates will be 7.8 percent and 6 percent respectively.

The local self-government will receive loans for infrastructure projects. These loans will have a 15-year repayment period and a three-year grace period.

Governor Jelasic voiced hope that the new loans will help reach the projected GDP growth of six percent, while Ivanovic said that the EIB loans will help increase the competitiveness of the economy of Serbia-Montenegrin.

Terence Brown said that the first EIB loan to Serbia, approved in 2002 and worth €20 million, was used for financing 24 projects in the field of economy, which created more than 600 jobs. He said that EIB decided to approve a new loan worth &euro45 million because local banks do not have sufficient funds to finance the development of SMEs on their own.