Government provides RSD 1 billion for rehabilitation of economy in the flooded area – Credit on 7-year period, at 1.5% interest rate

Business entities will be allowed to use these means, through Program of the Fund for Development of the Republic of Serbia, for purchasing new or overhaul of damaged equipment, rehabilitation of buildings and financing of current assets.

Credit will be granted up to the amount of the damage, with 7-year repayment period for investment credits and 4-year repayment period for current assets credits.

Interest rate would be 1.5% annually, while the maximum amount of one client connected with other entities could be RSD 1.85 million and could not excess the amount of damage. This Program, with thorough criteria and procedures, will be published on website of the Fund for Development of the Republic of Serbia, government’s official site writes.

Minister of Economy, Dusan Vujovic, said for the Tanjug that those are just initial means to start up suffering economy and added that the Government will provide additional funds if it is necessary.

- 60 – 70% of the credit is considered a present – said Vujovic, speaking about credits which Government has granted so far.

Prior to Government’s decision to grant RSD 1 billion from the budget, a team from Ministry of Economy, together with representatives of Agency for Foreign Investments and Export Promotion (SIEPA), Development Fund, Privatization Agency and Ministry of Finance went out into the field. They interviewed representatives of micro, small and medium enterprises on spot and approximately formed an impression of the amount of damage, said Vujovic.

Answering the question if entrepreneurs from the flooded area could count on certain incentives for taken credits, Vujovic said that Development Fund will provide ‘’inserted grace period’’ for those credits, by leaving repayments still until the end of the year, when normal repayment will be continued.

- Our recommendation to the banks is to meet the needs of their clients in the same way and offer them similar deadlines. Real refinancing could cause a break in functioning, forcing the banks to estimate collateral, and in some cases that collateral immediately disappears – explained Vujovic.

According to him, formal procedures could lead us into dead end. That is why banks need to understand the needs of damaged economy refinancing, in order to provide repayment of taken loans.

When it comes to Government credits payment, Vujovic explained that suppliers will be given an invoice, wherever it is possible, instead of cash, and in those places where it is necessary, special agencies will be hired to help with payments on public procurement.