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EBRD and CEB help Croatian small business
€20 million co-lending to Croatian Bank for Reconstruction and Development
Increasing its support for Croatian small businesses, the European Bank for
Reconstruction and Development (EBRD) has extended a €12 million loan to
Hrvatska Banka za Obnovu I Razvitak (HBOR), a wholly state owned development
bank established in 1992 to help rebuild the country's economy. The Council of
Europe Development Bank (CEB) is providing an additional €8 million. It is the
first time that the two institutions have invested together.
Providing support for small and medium-sized enterprises (SMEs) is at the
heart of a revised EBRD strategy for Croatia, published last year on the
Bank's website. Alain Pilloux, EBRD Director for Central Europe, said:
"Entrepreneurs are shaping the new Europe by creating a middle class and
helping drive the economic transition of the region. It is of prime importance
that we support them."
Mr Martin Murtfeld, First Vice Governor, who signed the loan on behalf of
Governor Raphaël Alomar, lauded HBOR's promotional role for Croatia's private
sector and stressed the social importance of the new jobs that the programme
is expected to create.
The loan proceeds will be used by HBOR - known in translation as the Croatian
Bank for Reconstruction and Development - to fund long-term investment
projects in the SME sector, either directly or through commercial banks. By
promoting smaller businesses, which generally have a higher growth rate and
create more jobs than large enterprises, the facility should provide a boost
to private-sector development in Croatia. In addition, the facility will close
a gap in the availability of long-term funding for such businesses.
The EBRD is a strong advocate of SME financing. It has co-invested in dozens
of projects across central and eastern Europe, together with institutions like
CEB.
Set up in 1956, the CEB has 35 member states, including 14 central and eastern
European countries. The Bank grants loans to its member states, financial
institutions and local authorities for the financing of projects in socially
vital sectors. Previously known as the Council of Europe Social Development
Fund, the Bank adopted its new name in November 1999.
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