The EIB will invest €30 million to accelerate the recovery of Serbian companies operating in sectors most affected by COVID-19.
The loan with Erste Bank AD Novi Sad will unlock loans under more affordable terms for Serbian companies.
This is the first EIB operation in Serbia under the Team Europe COVID-19 support package.
The European Investment Bank (EIB) and Erste Bank AD Novi Sad (EBS) have agreed on a €30 million loan to enable the strong recovery of small and medium-sized enterprises (SMEs) and mid-caps in Serbia in response to the COVID-19-induced contraction. The loan will allow EBS to on-lend to companies severely affected by the pandemic, helping them retain jobs, preserve liquidity and ensure business continuity. This is the first operation in Serbia as part of the EIB’s €400 million financial programme earmarked for the private sector in the Western Balkans to ensure a fast response to and recovery from the COVID-19 pandemic, as announced at the EU-Western Balkans Summit held in Zagreb in April 2020.
The loans will be available to companies operating across different sectors strongly hit by the pandemic, such as wholesale and retail trade, accommodation, transport, food and beverages, and services. The EU is a strategic partner for Serbia due to its high economic integration with the EU. With the funds from the EU bank, EBS will help the sustainable economic recovery of Serbian SMEs by addressing their short-term working capital needs, but at the same time enabling longer-maturity investments.
EIB Vice-President Dario Scannapieco said: “Surveys show that around 85% of Serbian SMEs have been negatively affected by the crisis, while 60.5% of companies have had to drastically reduce their productive capacities. We understand that without urgent support for the private sector, the economic recession triggered by the pandemic will escalate further, hindering the overall socioeconomic recovery of the Western Balkans. Therefore, the EIB and the Team Europe initiative have joined forces to inject much-needed liquidity into SMEs, which employ over 60% of the working population in Serbia. By doing so, we hope to encourage them to withstand the economic downturn and pave the way for their long-term recovery.”
“In these times of crisis, now more than ever, our clients need support to successfully overcome all the challenges we face. Preserving people’s health, but also businesses and workplaces, currently represents the biggest priority for our entrepreneurs. We are at their disposal with various kinds of support, and we are very proud that Erste Bank is the first bank in Serbia with which the European Investment Bank will begin this important programme to provide small, medium-sized enterprises and mid-caps with new sources of liquidity at favourable conditions, as well as the possibility to finance working capital and investments.” said Slavko Carić, Executive Committee President of Erste Bank.
The EIB and EBS have a track record of successful cooperation in supporting SMEs in the region. From 2009 to date, the EIB has invested over €1.8 billion in the Serbian economy, which has helped retain over 320 000 jobs.
About the EIB in Serbia
The EIB has been active in Serbia since 1977, providing finance to support key infrastructure projects, as well as SMEs, industry, services and local authorities. Since the start of its activities in the country, a total of over €6 billion of investments in SMEs and the revitalisation of transportation, education, healthcare and utility infrastructure have been made. For more information regarding the EIB’s projects in Serbia, please refer to: https://www.eib.org/en/projects/regions/enlargement/the-western-balkans/serbia/index.htm
About the EIB in the Western Balkans:
The EIB is one of the leading international financiers in the Western Balkans. Since 2007, the Bank has financed projects totalling almost €8 billion in the region. Besides continuing its support for the reconstruction and upgrade of public infrastructure, since 2010 the EIB has expanded into many new areas, such as healthcare, research and development, education and SMEs.
Erste Bank AD Novi Sad is a dynamic bank focused on operations with retail clients, local communities and small and medium-sized enterprises. Its operations with small and medium enterprises have recorded outstanding results, positioning the Bank as the fastest-growing in this important segment in 2018, among 28 banks on the market. EBS is a systemically important bank in Serbia according to the Central Bank classification. It is a subsidiary of Erste Group, a banking group that dates back more than 200 years, and is one of the largest financial services providers in Eastern Europe in terms of clients and total assets. For additional information, please visit : www.erstebank.rs
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