EBRD in €40 million loan to galvanize Croatia’s economy ahead of EU entry

By Olga Rosca
@olgarosca

The EBRD and Erste&Steiermärkische Bank d.d., Croatia, also known as Erste Bank Croatia, are joining efforts to support Croatia’s real economy with a €40 million financing package.

From this loan to Erste&Steiermärkische Bank €30 million will be dedicated to on-lending to private companies and the remaining €10 million will be used for factoring operations through Erste Factoring Company.

The funds will be channelled to micro, small and medium-sized enterprises via longer tenor investment loans, working capital facilities and factoring products to enhance their competitiveness ahead of Croatia’s EU accession in 2013.

Erste&Steiermärkische Bank, owned by the Erste Group, is the third largest bank in Croatia and provides a diverse range of banking services to corporate and retail customers with a strong focus on small and medium-sized enterprises (SMEs).

 “With this investment, the EBRD is working hand-in-hand with Erste&Steiermärkische Bank to make sure that private companies in Croatia have continued access to financing to enable them to increase their competitiveness and contribute to economic recovery and growth. As part of the Joint IFI Recovery Action Plan for Central and South-Eastern Europe, the project also supports Erste&Steiermärkische Bank in diversifying its funding base and help sustain the bank’s level of operations particularly to small businesses over the medium term” said Zsuzsanna Hargitai, Director for Croatia and Hungary operations at the EBRD.

Last month the EBRD teamed up with the World Bank and the European Investment Bank in a joint commitment to invest €30 billion in the financial and corporate sectors in central, eastern and south-eastern Europe in 2013 and 2014 to help the economies rebound. Under this initiative, the EBRD will embark on investments to help boost export-led growth and facilitate regional integration in south-eastern Europe.

“The intensive focus on SMEs and support to quality projects that promote development of real economies and boost employment growth, are the base of Erste Bank strategy.  Through this credit line we will provide investment loans, working capital and other financial products and our goal is to provide our clients with better access to financing“, said Boris Centner, Member of Erste bank Management Board.

Since the beginning of its operations in Croatia, the EBRD has invested over €2.5 billion in 133 projects in the country, mobilising over €4 billion of investment from other sources of financing.