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The Government of the Republic of Serbia

In the service of citizens

Government adopts measures to allow easier loan repayment

Belgrade, 7 April 2011

Prime Minister Mirko Cvetkovic said that the Serbian government has adopted measures that will enable citizens to more easily repay their loans with a grace period of 24 months.

Mirko Cvetkovic, left, and Veroljub Dugalic

Cvetkovic explained that the measures are aimed at people who have long-term loans so that for the period of 24 months they repay only the interest. The cost per person on average is expected to be about €50 a month, said the Prime Minister and added that these measures should apply to more than 500,000 citizens.

He announced that the Serbian government, in cooperation with the National Bank of Serbia (NBS) and the Serbian Banks Association (UBS), is considering similar measures for companies.

The government expects to receive from UBS initial proposals for these measures, which will then be further agreed on, he said.

He also noted that the government is not prepared to lower the price of Telekom Srbija under €1.4 billion in talks with Telekom Austria, which was given to amend the offer.

Everyone is talking about a monopoly in mobile telephony, and not the landline, the Prime Minister stated, recalling that whoever buys Telekom Srbija will also have a 98% share in landlines.

Cvetkovic stressed that the monopoly is viewed in a different perspective in branches requiring a licence, and in a completely different manner in those with free market participation.

Monopoly is not a question of a majority share, but of whether this share is used in a manner opposite to the free market, he said, adding that this is why there are regulatory bodies tasked with protecting the free market.

UBS Secretary General Veroljub Dugalic said that more than 451,000 citizens are eligible for their loans to be rescheduled within the measures adopted today by the Serbian government.

Dugalic specified that the measures will include all long-term loans with a repayment period exceeding one year, stressing that they do not refer to subsidised cash loans and consumer loans that have already been reprogrammed, or the ones with a previously agreed grace period. The average reduction of an instalment per each loan beneficiary will be RSD 5,012 and the total amount of potential reprogramming will total RSD 2.26 billion. Dugalic noted that almost 328,000 cash loans meet the requirements for reprogramming, as well as 72,000 consumer loans, 13,000 adaptation loans, 68,000 housing and 16,000 agricultural loans. He added that banks did not speak out individually about the programme, announcing a meeting of the managing board of UBS for tomorrow, after which banks will be invited to join loan reprogramming.