EIB and Erste Banka Serbia agree on €30m loan for strong recovery of SMEs

The loans will be available to companies operating across different sectors such as wholesale and retail trade, accommodation, transport, food and beverages, and service activities, strongly hit by the pandemic.

The European Investment Bank (EIB) and Erste Banka Ad Novi Sad (EBS) agreed on a €30 million loan allow for a strong recovery of small and medium-sized enterprises and mid-caps in Serbia in response to the COVID-induced contraction. The loan will allow EBS to on-lend to companies severely affected by the pandemic, supporting them in retaining jobs, preserving liquidity and ensure business continuity. This is the first operation in Serbia as part of EIB's €400 million financial programs earmarked for the private sector in the Western Balkan for a fast response and recovery from COVID-19 pandemic, announced at the EU Western Balkan Summit held in Zagreb in April 2020.

The loans will be available to companies operating across different sectors such as wholesale and retail trade, accommodation, transport, food and beverages, and service activities, strongly hit by the pandemic. EU is a strategic partner for Serbia due to its high economic integration with the EU. With the funds from the EU Bank, EBS will help the sustainable economic recovery of Serbian SMEs by addressing their short-term working capital needs but at the same time allowing longer-maturity investments.

EIB Vice-President Dario Scannapieco said: "Estimates show that around 85% of Serbian SMEs have been negatively affected by the crises, whereas 60.5% of companies had to reduce their productive capacities drastically. We understand that without urgent support to the private sector, the economic recession triggered by the pandemic will escalate further, hindering the overall socio-economic recovery of the Western Balkans. Therefore, EIB and the Team Europe initiative joined forces to inject much-needed liquidity to small and medium businesses that employ over 60% of the active population in Serbia. By doing so, we hope to encourage them to withstand the economic downturn and path the way for their long-term recovery."

"In this time of crisis, now more than ever, our clients need support to successfully overcome all the challenges we have faced. Preserving people's health, but also businesses and workplaces currently represents the biggest priority for our entrepreneurs. We are at their disposal with various kinds of support, and we are very proud that Erste Bank is the first bank in Serbia with which the European Investment Bank begins this important programme that will provide small, medium-sized enterprises and mid-caps new sources of liquidity at favourable conditions, as well as the possibility to finance working capital and investments," said Slavko Carić, Executive Committee President of Erste Bank.

The EIB and EBS have a track record of successful cooperation in supporting SMEs in the region. From 2009 to date, the EIB invested over €1.8 billion in Serbian economy, which helped retaining over 320 000 jobs.