The EBRD and Erste Bank Serbia are joining efforts to increase the flow of credit to the country’s real economy sector with a €10 million financing for on-lending to Serbian micro, small and medium-sized enterprises (MSMEs).
MSMEs represent the main source of private sector employment in Serbia and are major contributors to the country’s economy, but in the current economic environment companies are facing limited access to financing for their development and growth.
The EBRD loan, extended under the EBRD’s Western Balkans and Croatia Financing Framework,* will assist Erste Bank Serbia in meeting the demand from private sector enterprises for short-, medium- and longer-term loans.
At least 60 per cent of the EBRD credit line will be used to support businesses outside the Serbian capital, Belgrade. Besides financing the SMEs, Erste Bank’s intention is to extend part of this credit line to the smallest legal entities as well – micros and individual entrepreneurs.
“The EBRD is pleased to continue its successful activity with Erste Bank Serbia in the current challenging environment. Through this new credit line we are supporting the development of the MSME segment, one of the main drivers of economic recovery especially in the regions outside the capital,” said Henry Russell, EBRD Director for Financial Institutions in Western Balkans, Croatia, Belarus and Moldova.
"This credit line will provide us with additional funds to finance a broader range of companies throughout Serbia on competitive terms, which is very important considering the current needs of the MSME sector," said Slavko Caric, CEO of Erste Bank Serbia. He added that the new financing is also an important step in Erste Bank Serbia's cooperation with the EBRD, which started last year.
Since the beginning of its operations in Serbia, the EBRD has committed over €3 billion in various sectors of the country’s economy, with a total value of some €6 billion.
Erste Bank Serbia is committed to financing individual and corporate clients. In 2011 the corporate lending portfolio of Erste Bank Serbia recorded an increase of 8.1 per cent relative to the end of the previous year.
* Western Balkans and Croatia Financing Framework is a €250 million framework aimed at supporting banks and non-bank financial institutions in Albania, Bosnia and Herzegovina, FYR Macedonia, Montenegro, Serbia and Croatia.