High demand for new product among local SMEs
The European Bank for Reconstruction and Development (EBRD) is adding to the variety of funding sources available to Croatian firms with a €90 million loan to Raiffeisen Factoring d.o.o. to extend financing in the form of factoring to small and medium-sized enterprises (SMEs) and corporate clients. Factoring is an effective financial product for addressing working capital needs for both local SMEs and corporates.
Stable medium-term funding is fundamental for the revival of SMEs and their activities on the back of economic recovery as well as for the continued development of both the factoring and private sectors in Croatia.
Raiffeisen Factoring is one of the leading players in the Croatian factoring market and continues to introduce new products to expand its client base and provide support to those clients in the less developed regions of the country. The €90 million EBRD loan will be structured in three tranches and will provide the company with continued medium-term financing support.
Phil Bennett, EBRD First Vice President, said: “SMEs are strong vehicles of the Croatian economy, contributing 55 per cent of total value added to the national economy and providing 67 per cent of total employment. We are united in our determination to strengthen Croatia’s SME sector and support the country’s growth. This new facility with Raiffeisen Factoring reinforces our strategic focus on this segment.”
Vedrana Jelušić Kašić, EBRD Director for Croatia, said: “We are pleased to expand and deepen our cooperation with Raiffeisen Factoring with this facility. We are encouraged by the successful implementation of previous loans which have demonstrated strong market demand for this product, especially from SMEs. The need for funding is particularly acute in remote areas of Croatia and we are very happy that addressing this issue will represent a special focus of activities under the new EBRD loan.”
Igor Fišer, President of the Board of Raiffeisen Factoring, added: “We are glad to continue the successful co-operation with the EBRD that confirms that the EBRD has recognised us as a reliable and good partner. Factoring is the fastest growing financial product in Middle and Eastern Europe and Raiffeisen Factoring business plans and strategic goals follow the actual market trends. The loan proceeds will be used to increase SME placements as well as to create new factoring products.”
The EBRD has been active in Croatia as an investor since the country’s independence and has invested some €3.5 billion in 187 projects to date. The Bank’s activities include all sectors of the economy and are especially strong in the infrastructure, corporate, financial institutions and energy sectors.
The EBRD’s strategic plan for the countries where it invests, including Croatia, for the period 2016-18 has three priorities: strengthening economic resilience, addressing global challenges and supporting regional integration.