Dinar loans of EBRD for SMEs by late March 2017

Representatives of the European Bank for Reconstruction and Development (EBRD) and the Government of Serbia and the National Bank of Serbia (NBS) signed a memorandum of understanding on February 3, 2017, enabling the initiation of the crediting program of the bank in local currency for small and medium enterprises.

The memorandum was signed by Minister of Finance Dusan Vujovic, NBS Governor Jorgovanka Tabakovic and EBRD Country Manager for Serbia Daniel Berg. As announced, the first drawdown will be realized by the end of March 2017.

Berg pointed out that the signed memorandum was important for further cooperation with the Government of Serbia, as well that it had been realized thanks to great efforts of NBS and the Ministry of Finance.

The memorandum of understanding has two goals. In addition to stimulating the realization of the program of financing SMEs in local currency, the companies will be provided with greater access regarding both the money and the technical support, Berg said.

Serbia, as he said, now has access to global funds of EUR 500 million for financing SMEs. Berg said that EBRD would reduce the interest rate for local currency loans in order to help the SMEs sector.

He added that local currency was very important for the country’s economy. EBRD issued dinar-denominated bonds in early December 2016, which marked the first instance of an international financial institution’s issuance of a bond denominated in local currency in Serbia. A total of 250 dinar-denominated bonds were issued in the amount of RSD 2.5 billion, and the funds will be used as loans to local enterprises looking to reduce foreign exchange risks in incurring debt.

The memorandum envisions that all signees confirm the importance of crediting the economy in local currency and the development of the local capital market, and they also agree that increased effort should be made in promoting local currency indebtedness, protecting companies from foreign exchange risks.

As said at the conference, EBRD has invested nearly EUR 4.5 billion in various sectors of the Serbian economy so far.

NBS Governor Jorgovanka Tabakovic said that the signing of the memorandum was simply a continuation of a good cooperation with EBRD. She expects that the program would stimulate the development of the SMEs sector and deepen the dinar market in Serbia.

According to her, the political, macroeconomic and financial stability are a foundation for bringing back the trust of investors in local economic potentials and in the carriers of the economic policy.

Minister of Finance Dusan Vujovic emphasized that the memorandum showed that Serbia was a financially stable country and that it was keeping its finances under control.

He emphasized that the private sector was prepared for dinar-denominated loans.