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EBRD, EU and Raiffeisenbank launch micro-loan programme
€10 million loan to support single entrepreneurs and small businesses
The European Bank for Reconstruction and Development and Raiffeisenbank a.s. are launching a new financial facility to strengthen their support for small and medium-sized enterprises. The so-called micro loan is specially designed for sole proprietors and entrepreneurs - a private mechanic to buy or repair equipment, for example, or a transport company to purchase commercial vehicles. The scheme is part of a €10 million loan to Raiffeisenbank a.s., the Czech subsidiary of Austrian financial group RZB Group, under the successful EU/EBRD SME Finance Facility.
Micro loans will range from CZK100,000 to CZK800,000 (about €3,000 to €25,000), and can be paid back in installments for up to four years. For loans with maturities of more than a year, Raiffeisenbank will offer an "installment holiday," allowing deferment of the first payment for up to three months. For easy access to the programme, Raiffeisenbank has cut administrative procedures to a minimum and promises to notify clients within five days of receiving an application.
The EBRD's new loan to Raffeisenbank will also be used to make loans of up to €125,000 for small and medium-size enterprises. Alexander Auboeck, EBRD Director for the Czech Republic, said such access to finance for small businesses is of critical importance for the Czech economy.
"The micro-loan programme is another step in Raiffeisenbank's strategy to increase its support for SMEs, whose significance will continue to rise as the Czech Republic enters the last phase of the EU accession process. Micro loans will help prepare many entrepreneurs for the rigours of EU competition," Raiffeisenbank Czech Republic CEO Kamil Ziegler said.
The loan is being provided through the EU/EBRD SME Finance Facility, set up by the European Commission under its Phare Programme in cooperation with the EBRD to promote the development of smaller businesses. The facility provides access to loans, leasing and equity finance from local financial intermediaries in the EU-accession countries of central and eastern Europe.
The Phare Programme is one of the main channels for the EU's financial and technical cooperation with the future member countries of the Union. It foresees annual allocations of €1.5 billion for the eligible countries through 2006.
Raffeisenbank a.s. offers a wide range of banking services to private and corporate clientele in the Czech Republic. Its parent, RZB Group, is the leading commercial and investment bank in central and eastern Europe.
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