Improving liquidity of SME and corporate sector in Croatia

By Axel  Reiserer

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The EBRD is providing a €10 million loan to Raiffeisen FACTORING d.o.o., one of the leading factoring companies in Croatia, for the purpose of providing factoring services to small and medium-sized enterprises (SMEs) and corporate clients in the country.

The loan will increase the financing that Raiffeisen FACTORING d.o.o. will be able to make available to the real economy in the form of factoring. The main driver for greater use of factoring and supply chain financing instruments and for an expansion of the range of factoring products is predominantly to help SMEs and corporate clients to improve liquidity and working capital management.

Further growth in factoring and supply chain financing, in terms of both volumes and customers served, will contribute to easing the liquidity pressures many businesses have been facing as a result of the crisis. It will also contribute to freeing up working capital needed for the continuation of business activity and for further business expansion in the private sector.

Demand for factoring services is growing rapidly and a new law is currently under preparation which will extend the scope of available services.

With this loan the EBRD is specifically targeting local SMEs which remain constrained in their development by limited access to funding. Small and medium-sized enterprises in Croatia employ almost 64 per cent of the total workforce and account for about 50 per cent of the country’s GDP.

Raiffeisen FACTORING d.o.o. is a fully-owned subsidiary of Raiffeisenbank Austria d.d. Zagreb and started operations in January 2008. The company is expanding rapidly in order to meet growing demand. Factoring products are still not widely used in Croatia and the additional efforts will be undertaken to inform and educate the particularly SME clients on the advantages of factoring products.

Vedrana Jelušić Kašić, EBRD Director for Croatia, said: “We are very pleased to sign our first loan agreement with Raiffeisen FACTORING d.o.o. today and look forward to a successful cooperation. We are united in our determination to strengthen Croatia’s SME sector and support the country’s return to growth.”

Igor Fiser, President of Raiffeisen FACTORING d.o.o., added: “We are pleased that we have been recognised by the EBRD as a partner, and we are particularly pleased with the fact that this is the first EBRD direct financing of a factoring company in Croatia. We believe that this is just the beginning of a mutually satisfying cooperation. The loan will be used to further develop factoring products by providing factoring services to SMEs.“

The loan comes under the EBRD Western Balkans and Croatia Financing Framework, a €250 million facility, for banks and non-bank financial institutions in Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia, Kosovo, Montenegro and Serbia to provide senior debt facilities for corporate and micro, small and medium-sized enterprises.

The EBRD has been active in Croatia as an investor since the country’s independence and to date has invested some €2.7 billion in almost 150 projects. The Bank’s activities cover all sectors of the economy and are especially strong in infrastructure, corporate, financial institutions and energy.

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