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EBRD and Komerční banka sign €20 million SME credit line
European Commission provides additional support for SME financing
The European Bank for Reconstruction and Development is extending a €20
million credit line to Komerční banka (KB) to support small and medium-sized
enterprises (SMEs) in the Czech Republic. The line, with a seven-year
maturity, is provided under the SME Finance Facility funded jointly by the
EBRD and the European Commission (EC). It will help KB build a portfolio of
good quality loans of up to €125,000 each.
At the same time, KB will receive up to €1 million of financial and technical
support from the EC. Much of that will go towards a training programme for SME
financing in the bank aimed at speeding up the credit-approval process.
The development of SMEs is a key priority for the EBRD, and KB, with 334
branches, plays a leading role financing them in the Czech Republic. Using the
long-standing experience of its parent company, Société Générale, KB helps
small and medium-sized Czech enterprises cope with the competitive environment
in the EU. The €20 million facility will now help KB further improve the
accessibility of financing for entrepreneurs in the Czech Republic, as well as
focus more on smaller loans using credit scoring and sound credit principles.
Petr Slabý, Deputy Head of Marketing of Komerční banka, said the credit line
is an important boost for the bank’s SME lending, and said Komerční banka is
currently preparing a new credit product for SMEs, rising from EBRD credit
line, which should be launched at the beginning of next year.
SMEs represent one of the key drivers of the economy and this facility with KB
will contribute to the development and funding of this sector, said Alexander
Auboeck, EBRD Director for the Czech Republic.
The facility was launched in 1999 under the EC’s Phare Programme with the EBRD
to provide SMEs with access to loans, leasing and equity finance from local
financial intermediaries in the EU accession countries. It has channelled more
than €796 million (€690 million from the EBRD, €106 million from the EU) to
SMEs, including €74 million in the Czech Republic.
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.
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