Saturday, 19 December 2020

HBOR Loans Provided to Croatian Farmers with 0.5% Interest

As Zlatko Simic/Novac writes on the 18th of December, 2020, joint cooperation between the Ministry of Agriculture and HBOR in the middle of this year introduced a new financial instrument called ''Working capital for rural development" which provided favourable HBOR loans and funds for lending liquidity to Croatian farmers and processors of agricultural products, as well as entities operating in the forestry sector affected by the ongoing pandemic.

Business difficulties caused by the coronavirus epidemic are proven by one of the ten criteria, including reduced demand or the possibility of product placement, an increase in production costs or the inability to carry out agro-technical measures in a timely manner.

Working capital HBOR loans are approved directly at an interest rate of 0.5 percent, and loan users are exempt from all fees normally charged when approving loans.

Documentation needed for this HBOR loans

The loan amount can be from 190 thousand to 1.52 million kuna, the funds have been approved for a period of up to five years, including a grace period of up to 12 months.

Applications for these HBOR loans can be submitted by entities registered as family farms (OPG) in the VAT system, a trade (obrt) registered to perform an agricultural activity, a company or cooperative, including producer organisations. The documentation required for processing can also be submitted electronically, and the processing of loan applications is further simplified and accelerated.

HBOR loans can be used for working capital required for the smooth running of production and financing of current operations (the preparation of production, the purchase of raw materials, other production costs, labour costs, the settlement of trade payables and other general operating expenses).

These HBOR loans will also be available in 2021

Existing credit liabilities to commercial banks and other financial institutions cannot be settled with these funds.

The total amount of funds intended for these loans is 130 million kuna, and so far, HBOR loans in the amount of more than 70 million kuna have been approved. The funds will continue to be available during 2021, and interested beneficiaries can still apply for a loan that they can use, for example, to finance spring sowing or planting, production and processing.

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Friday, 20 November 2020

EIB and HBOR Sign New Loan Agreement to Support SMEs in Croatia

ZAGREB, November 20, 2020 - The European Investment Bank (EIB) and the Croatian Bank for Reconstruction and Development (HBOR) have signed a new, €142.5 million loan agreement to  support small and medium enterprises (SMEs) in Croatia, the two financial institutions said on Friday.

This is the second tranche of a package worth a total of €400 million. It is part of the EIB's youth employment initiative under which companies that hire young people are granted loans under more favourable terms.

The initiative addresses the issue of youth unemployment as one of the biggest social and economic challenges faced by Croatia and Europe.

The loan is intended for SMEs requiring funds to maintain cash flow and jobs and for further investment to ensure faster recovery from the consequences of the coronavirus pandemic, HBOR Board President Tamara Perko said.

This agreement is yet another confirmation of our good cooperation with the EIB and will provide us with an additional source of affordable lending and make it possible for us to further lower interest rates on loans to businesses employing people of up to 30 years of age, she added.

EIB Vice-President Dario Scannapieco said that the EIB continued to support faster growth and development of the Croatian economy, this time through support for SMEs.

This is the second transaction signed since the outbreak of the coronavirus pandemic in March, providing a total of €240 million for favourable loans to Croatian SMEs and mid-caps, he said.

Last month the EIB and HBOR signed a €100 million credit line for Croatian SMEs and mid-caps affected by the COVID-19 crisis. 

To date the EIB has supported the economic and social development of Croatia by investing €6.71 billion in the most important sectors of the national economy. Another key component of EIB activities in Croatia is support for SMEs and mid-caps through the creation of long-term financing options in cooperation with local financial institutions. To date the EIB has supported Croatian SMEs by unlocking new sources of finances worth close to €3.75 billion.

Friday, 10 July 2020

HBOR Extends Repayment Period of 'COVID-19' Loans to Five Years

As Novac writes on the 9th of July, 2020, the Croatian Bank for Reconstruction and Development (HBOR) has extended the repayment period of "COVID-19" working capital loans from three to five years in order to facilitate the operations of Croatian businessmen, according to HBOR.

"Due to the still difficult business conditions being experienced by Croatian businesses, and in order to facilitate business and the repayment of credit obligations, HBOR has extended the repayment period under the Working Capital Programme Measure ''COVID-19'' to five years, including the possibility of using a grace period of up to one year," reads the bank's statement on the matter.

An interest rate as low as 0% on HBOR's share in the loan

In addition to a longer repayment period, the advantage of this programme is the interest rate of 0% on HBOR's share in the loan for the first three years of repayment (the interest rate depends on the regulations on the allocation of state aid). HBOR's share in the loan isn't subject to a fee for processing the request, nor is there a fee for reserving funds. Borrowers can be private and public sector entities but they both need to prove the negative consequences caused by the COVID-19 epidemic (meaning they need to obtain a COVID score). The request for these funds can be submitted to one of the fourteen banks with which HBOR has agreed cooperation under this particular programme. The lowest loan amount that can be requested from HBOR's sources is 1 million kuna, and the second part of the loan is then approved from a commercial bank source. For loans larger than 37 million kuna, direct loan approval is possible.

Lower interest rates were provided through 8 banks

Business owners can also request favourable liquidity funds from HBOR sources through 8 banks with which this development bank concluded framework loan agreements back in May. In this way, 1.2 billion kuna was made available to Croarian business ownders for new liquidity loans, which are granted at interest rates reduced by 0.75 percentage points compared to regular loans, thanks to HBOR's sources. The lowest loan amount that can be requested is not limited, and the highest is 35 million kuna.

300 million kuna has already been approved for businesses operating in the tourism industry

Until June the 5th, 2020, small and medium-sized enterprises from the Croatian tourism industry could apply directly to HBOR for a working capital loan at an interest rate of as little as 0%. To date, more than 550 applications have been received, half of which have already been processed, and loans totaling almost 300 million kuna have already been approved.

Working capital for rural development with an interest rate of 0.5%

Loans under the Working Capital for Rural Development programme in the amount of 190,000 kuna to 1.52 million kuna are approved by HBOR directly, without any accompanying fees, with an interest rate of 0.5% and with promissory notes as the only collateral.

HBOR assumes 50% of the risk for liquidity loans granted to exporters and indirect exporters

In addition to favourable loan funds, HBOR also introduced the Export Liquidity Loan Portfolio Programme. HBOR provides 50% of the amount of principal and interest on approved loans that banks include in their portfolio and as such, this enables the faster and easier approval of new funds to preserve the liquidity of exporters and indirect exporters.

An extended moratorium for all clients

HBOR has directly enabled all clients to whom a loan has been approved to use the moratorium for up to a total of 7 months (until the 30th of September, 2020), or for up to 10 months for those who have a positive COVID score (until the 31st of December, 2020). Clients engaged in tourism are allowed to use the moratorium for up to 16 months, more precisely until June the 30th, 2021, according to their statement.

For more, follow our business section.

Friday, 3 July 2020

HBOR Extends Moratorium For All Clients Amid Coronavirus Pandemic

HBOR will send a direct notification to the the beneficiaries of its direct loans on the conditions for extending the moratorium and the consent form that the loan beneficiaries will need to submit to HBOR.

As Poslovni Dnevnik writes on the 2nd of July, 2020, since business of varying kinds is still affected by the coronavirus epidemic, HBOR has extended its moratorium. All of HBOR's clients are allowed to use the moratorium for up to seven months, ie until the 30th of September, 2020. For clients who have a positive COVID score according to the FINA methodology (or can otherwise prove a decline in their income) it is possible to use the moratorium for up to ten months, ie until the 31st of December, 2020. Clients engaged in tourism are allowed to use the moratorium for up to sixteen months, ie until the 30th of June, 2021.

In March, in order to reduce the negative consequences of the COVID-19 epidemic, HBOR made it possible for its clients to reschedule loans and use the moratorium until the 30th of June, 2020, with the announced possibility of extension.

''The use of the moratorium, which we made possible as a first measure, has so far been accepted by almost 1,500 clients. Since Croatian businesses are still suffering from the economic consequences of the epidemic, and given the still difficult working conditions, it was possible to extend the moratorium and introduce new conditions for the repayment of due obligations,'' said Tamara Perko, President of HBOR.

As stated, HBOR will send a direct notification to its direct loan beneficiaries on the conditions for extending the moratorium and the consent form that the loan beneficiaries will need to submit to HBOR.

Liabilities under the loan principal covered by the moratorium will be repaid by the clients through an appropriate extension of the repayment period.

Clients who have been granted a HBOR loan through a commercial bank or a risk-sharing model, as well as those who use HBOR financing through leasing companies, should submit a request for a moratorium to their commercial bank or leasing company.

The rescheduling of credit obligations up to sixteen months

In addition to the moratorium, by introducing a measure of rescheduling existing credit obligations, HBOR enabled those using the service to extend the terms of use and the repayment of loans. For reprogramming up to six months, beneficiaries are exempted from paying the usual fees.

Liquidity loans - interest rates as low as 0% and possible insurance of 50% of the loan amount

Those beneficiaries also have favourable HBOR funds for liquidity lending at their disposal, which are approved in cooperation with commercial banks or directly for businesses from certain industries.

Individuals/businesses can apply for loans for working capital through banks according to the risk-sharing model with banks (through the working capital loan programmes Working capital Measure COVID-19 and Working capital for entrepreneurs in wood processing and furniture production) and through framework loans to banks. Funds under the risk-sharing model are approved with an interest rate of as little as 0% on half of the loans from HBOR sources, and liquidity loans based on framework loans to banks boast an interest rate lower by 0.75 percentage points when compared to the regular one.

Working capital loans for rural development are approved directly by HBOR, as are loans for businesses working in tourism for which applications were received by the 5th of June, 2020. By that date, HBOR received a total of 556 applications, half of which have already been processed, and loans in the total amount of more than 250 million kuna have already been approved.

In addition to favourable loan funds, HBOR has introduced a new loan portfolio insurance programme for exporters' liquidity. This programme enables the faster and easier approval of new funds to preserve the liquidity of exporters and indirect exporters.

For more, follow our business page.

Saturday, 30 May 2020

HBOR: 130 Million Kuna Working Capital for Rural Development Secured

As Novac writes on the 29th of May, 2020, the Ministry of Agriculture and HBOR have prepared a new financial instrument called ''working capital for rural development", for which 130 million kuna has been provided, and loans will be approved directly by HBOR, with an interest rate of 0.5 percent, while users will be exempt from having to pay all fees.

This is a new programme for lending liquidity to farmers and processors of agricultural products and entities operating in the forestry sector whose business is being negatively affected by the ongoing coronavirus pandemic, the Ministry of Agriculture and the Croatian Bank for Reconstruction and Development (HBOR) point out in their separate statements.

These loans will be approved directly by HBOR at a welcome interest rate of 0.5 percent, and loan users are exempt from needing to pay all fees normally charged upon approval (for example, fees for processing a loan application, for reserving funds, etc) as well as fees for the alteration of credit conditions, including early loan repayment fees.

Loan applications will be able to be submitted to HBOR as of Monday, June the 1st, 2020. The minimum loan amount stands at 190,000 kuna and the maximum is 1.52 million kuna.

These funds are approved for a period of up to five years (including a grace period of up to twelve months), or up to three years (including a grace period of up to six months) for loans in the amount of 760 thousand kuna or less.

The Ministry of Agriculture has pointed out that this new instrument will provide liquidity in the agricultural production, processing and forestry sectors in the short term, and also work to further encourage recovery after the public health crisis caused by the COVID-19 pandemic.

The funds will be able to be used to finance employee salaries, overheads and other basic operating costs, the procurement of raw materials and the settlement of liabilities to suppliers and other current operating costs. The funds cannot be used to settle existing credit obligations to commercial banks and other financial institutions, HBOR noted.

The total amount of funds intended for these loans amounts to the aforementioned 130 million kuna, and is provided by the conversion of part of another financial instrument called "investment loans for rural development" into the new financial instrument called ''working capital for rural development".

Loan applications will be being received until December the 31st, 2020, or until the total amount of available funds are used up, according to a statement from the competent ministry and from HBOR.

For more, follow our business page.

Sunday, 24 May 2020

HBOR Provides Croatian Businesses With New Liquidity Loans

As Novac writes on the 22nd of May, 2020, through framework loans to banks, HBOR has enabled the approval of new liquidity loans to Croatian businesses, enterprises and entrepreneurs affected by the coronavirus pandemic.

The liquidity loans come with welcome interest rates reduced by 0.75 p.b when compared to regular loans. Zagrebačka banka d.d., Privredna banka Zagreb d.d., Erste & Steiermärkische Bank d.d., OTP banka d.d., Raiffeisenbank Austria d.d., Hrvatska poštanska banka d.d., Addiko Bank d.d. and Sberbank d.d., have all cooperated in the move.

Beneficiaries of these new HBOR liquidity loans can be micro, small and medium-sized enterprises, and medium-capitalised enterprises (with up to 3,000 employees) that weren't facing business difficulties on the 31st of December, 2019. Croatian businesses applying for this new type of loan should, according to the Methodology for Calculating a COVID score introduced by Fina, be assessed as clients whose business is at risk. Where exactly the need for additional funding actually lies is also imperative.

"This way of lending will enable the faster approval of funds needed by businesses along with a reduced interest rate. Namely, more than 1.2 billion kuna was made available to businesses for new liquidity loans, which banks will, thanks to HBOR's sources, approve at an interest rate reduced by 0.75 p.b. when compared to regular ones,'' said Tamara Perko, President of the Management Board of HBOR.

The maximum loan amount to an applying businesses can amount to no more than 35 million kuna, and the funds can be used to finance employee salaries, overhead costs and other basic operating costs, the procurement of raw materials and the settlement of liabilities to suppliers and other similar operating expenses. However, it should be noted that existing credit liabilities to commercial banks and other financial institutions cannot be settled with these funds.

For more information and for the possibility of loan approval, interested business entities should contact one of the previously listed commercial banks.

For more, follow our business page.

Friday, 10 April 2020

HBOR Says Loans Worth More Than 13.5 Billion Kuna Available to Real Sector

ZAGREB, April 10, 2020 - The European Commission on Thursday approved a second Croatian scheme for support to the economic sector in the context of the coronavirus pandemic, and the total credit potential of the two schemes is €1.8 billion (more than HRK 13.5 billion), intended for the real sector.

The schemes were approved on the basis of the Temporary Framework for State Aid Measures, adopted by the European Commission on March 19 and amended on April 3, the Croatian Bank for Reconstruction and Development (HBOR) said in a statement.

The first scheme, totalling €790 million (HRK 6 billion) and approved by the EC a few days ago, secures credit potential for exporters' liquidity in the form of insurance policies.

In cooperation with the Finance Ministry, a few days ago the HBOR put forward a second scheme, intended for small, medium and big enterprises affected by the coronavirus crisis and in need of working capital.

Under the scheme, the HBOR will provide favourable loans, with interest subsidised by the state. The total credit potential of subsidised loans is estimated at one billion euros.

More business news can be found in the dedicated section.

Monday, 28 January 2019

HBOR to Develop Venture Capital Industry in Croatia

ZAGREB, January 28, 2019 - The Croatian Bank for Reconstruction and Development (HBOR) and the European Investment Fund (EIF) on Monday signed a 70 million-euro investment programme to support fast-growing SMEs and mid-caps established and operating in Croatia.

The investment programme is supported by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe, according to a press release issued on the EIF web site.

The event at which the NPI Mandate Framework Agreement was signed, launched the initiative called CROGIP - Croatian Growth Investment Programme.

The HBOR management board chair Tamara Perko said at the ceremony in Zagreb that the agreement was supposed to help develop venture capital industry in the country.

HBOR and EIF each will participate in the programme with 35 million euro, "to finance this jointly developed programme and the combined commitments of 70 million euro are expected to catalyse additional private-sector investments into equity funds."

"A key programme objective is to support the emergence of fund managers, which focus a significant part of their investments into Croatian SMEs and midcaps," reads the press release.

EIF Chief Executive, Pier Luigi Gilibert was quoted as saying that "this new agreement will support the emergence of a sustainable private equity market in Croatia and to attract private investors to this market, by helping both national and international fund managers to target SMEs and midcaps," he added.

The European Investment Fund (EIF) is part of the European Investment Bank group.

More news on the HBOR can be found in the Business section.

Thursday, 25 October 2018

HBOR (Croatian Reconstruction and Development Bank) to Focus on EU Funds

ZAGREB, October 25, 2018 - The Croatian Reconstruction and Development Bank's (HBOR) strategy focuses on EU funds, introduction of new market products and stimulation of exports, HBOR Management Board chair Tamara Perko said at an international conference on export stimulation organised in Dubrovnik on Thursday by HBOR.

Wednesday, 21 December 2016

Croatian Small Businesses to Receive 220 Million Euros in Affordable Loans

Ministry of Regional Development and EU Funds and the Croatian Bank for Reconstruction and Development sign an important agreement.

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