December 17 (SeeNews) - Raiffeisenbank's Serbian unit has signed a 60 million euro ($73.4 million) loan guarantee agreement with the European Investment Fund (EIF) to support local small and medium-sized businesses, EIF said on Thursday.
The loan guarantees are provided by the Competitiveness of Small and Medium-sized Enterprises (COSME) programme, launched by the European Commission to improve access to finance for SMEs, and will allow Raiffeisenbank Serbia to offer a new, more flexible credit line with increased maturities and fewer collateral requirements to finance working capital and investments, EIF said in a statement.
The agreement introduces two new guarantee initiatives under the COSME Loan Guarantee Facility in Serbia including COSME Digitalisation, designed to help SMEs and digitalise their business operations, the EIF said.
"The digital transition is one of the strategic goals of the European Union and this guarantee scheme is an important step towards creating more resilient, sustainable and connected markets. These guarantees will enable our local partner, Raiffeisenbank, to reach out to companies with limited access to finance, such as technology startups, which are the driving force of innovation and competitiveness," Alain Godard, Chief Executive of the EIF, said.
The guarantees unlock new sources of financing for Serbia at a time when the COVID-19 pandemic is burdening SMEs with liquidity issues and restricting their ability to access finance, maintain daily operations and fund expansion plans, the EIF noted.
"It is our pleasure to take part in this important programme with our longstanding partners from Europe, with whom we share mutual values and views on direction in which the Serbian economy should be progressing. Investing in small businesses and facilitating their digital transformation is the best possible path for development, and our bank will be able to support them with favaourble credit lines, thanks to this guarantee scheme," Zoran Petrovic, CEO of Raiffeisenbank Serbia, said.
COSME is running from 2014 to 2020 with a total budget of 2.3 billion euro. At least 60% of the programme is devoted to improving access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs.
($ = 0.817176 euro)
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