EIB provides €200m to Development Fund of Serbia to support COVID-hit SMEs
The EIB funds will be available to Serbian small businesses for working capital needs and financing longer term investments under more flexible and favourable conditions.
The European Investment Bank (EIB), the bank of the European Union, will provide a €200 million loan to the Development Fund of the Republic of Serbia for the faster recovery of small and medium-sized enterprises (SMEs) and mid-caps from COVID-19. This is the sixth operation in the country implemented by the EIB under the Team Europe financial package for the Western Balkans, taking total EIB support for accelerating Serbia's recovery from COVID-19 to €380 million. The loan will speed up the recovery of the private sector, boost economic activity and help protect over 47 000 jobs while creating 5 500 new job opportunities for people in Serbia.
The EIB funds will be available to Serbian small businesses for working capital needs and financing longer-term investments under more flexible and favourable conditions. They are designed to maximise impact and offer different disbursement options, enabling SMEs in urgent need of liquidity to access the funds faster.
EIB Vice-President Lilyana Pavlova who is in charge of lending operations in Serbia said: "As a long-standing partner of Serbia and a member of Team Europe, the EIB continues to support the country in overcoming the most immediate COVID-related consequences, strengthening its economy and advancing with EU integration. Support for the private sector is an important part of that process and our priority at this moment is to help revive production while protecting the supply chains and jobs. Our operation today channels €200 million towards the worst affected SMEs and mid-caps in Serbia. This much-needed financial assistance enables business continuity and increases the resilience of the Serbian economy, paving the way to a faster post-COVID recovery and greater competitiveness."
Sinisa Mali, Minister of Finance, said: "Since the start of the pandemic, the Government of the Republic of Serbia has continued to provide ongoing support to the economy and citizens of Serbia, alleviating the negative consequences of the coronavirus. We have adopted and implemented two substantial financial packages for the economy and our citizens, and the third programme is currently being carried out. All these packages amount to €8 billion in total, accounting for 17.4% of gross domestic product. Thanks to these relief measures, we have managed to protect the economy, help enterprises continue their operations and preserve jobs. All three programmes include support for small and medium enterprises as well, in the form of financial assistance with minimum wage payments, authorisation for employers to postpone tax payments and contributions, and the provision of favourable financing with two guarantee schemes. The importance of small and medium enterprises for the entire economy is invaluable, and we are glad to be able to continue strengthening this sector together."
Andjelka Atanaskovic, Minister of the Economy, said: "Like the global economy, Serbia is facing risks and uncertainties due to the epidemic caused by COVID-19. Last year was very challenging, and to mitigate the negative consequences on the SME sector and preserve the stability of the financial and economic system, the Government of Serbia managed to support enterprises in preserving their businesses. The intention of the Government of Serbia is to continue this trend and provide additional support to economic entities in procuring working capital and maintaining current liquidity so that they can meet their obligations towards their business partners, employees and the state. Given the huge interest among businesses for this Government support, we needed additional funds, and they came in the form of EIB credit support. Thanks to this credit line, the Government of the Republic of Serbia will also help business entities to invest at this challenging moment. The "Recovery and Development" investment programme establishes a new credit line allocating credit funds to business entities on favourable terms for the implementation of new investments, which will accelerate the recovery and growth of economic activity in the Republic of Serbia despite the difficult economic conditions we will face immediately after the pandemic. The intention of this project, with the EIB's help, is to contribute to the recovery and development of SMEs by supporting new investments, preserving employment, encouraging economic development according to sustainable development principles and improving competitiveness by investing in digitalisation and the application of new technologies."
Mateja Norčič Štamcar, Chargée d'affaires at the EU Delegation to Serbia, said: "The European Union has been with Serbia from the beginning of the pandemic, in the immediate emergency phase and in supporting the vaccination campaign. It is a natural choice for the European Union to continue to support the economy also. We have directed some of our grants to this goal. The financial assets offered by the EIB are an integral part of our strategy to make SMEs stronger. They are the backbone of the economy."
Team Europe provides vital economic support for the Serbian economy
The EIB loan allows the Government of Serbia to provide vital economic support to the private sector. These funds are part of the Team Europe support package for the Western Balkans, which includes the €1.7 billion COVID-19 recovery programme introduced by the EIB in May 2020. This EU support also involves the ongoing deployment of two additional programmes, which will provide up to €900 million of new funding in the region. From 2009 to date, the EIB has invested over €2.2 billion in almost all key sectors of the Serbian economy, which has helped sustain over 320 000 jobs.