The FINANCIAL — The European Investment Bank (EIB) and Erste Bank AD Novi Sad (EBS) have agreed on a €30 million loan to enable the strong recovery of small and medium-sized enterprises (SMEs) and mid-caps in Serbia in response to the COVID-19-induced contraction. The loan will allow EBS to on-lend to companies severely affected by the pandemic, helping them retain jobs, preserve liquidity and ensure business continuity. This is the first operation in Serbia as part of the EIB’s €400 million financial programme earmarked for the private sector in the Western Balkans to ensure a fast response to and recovery from the COVID-19 pandemic, as announced at the EU-Western Balkans Summit held in Zagreb in April 2020.
The loans will be available to companies operating across different sectors strongly hit by the pandemic, such as wholesale and retail trade, accommodation, transport, food and beverages, and services. The 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 enabling longer-maturity investments.
EIB Vice-President Dario Scannapieco said: “Surveys show that around 85% of Serbian SMEs have been negatively affected by the crisis, while 60.5% of companies have had to drastically reduce their productive capacities. We understand that without urgent support for the private sector, the economic recession triggered by the pandemic will escalate further, hindering the overall socioeconomic recovery of the Western Balkans. Therefore, the EIB and the Team Europe initiative have joined forces to inject much-needed liquidity into SMEs, which employ over 60% of the working population in Serbia. By doing so, we hope to encourage them to withstand the economic downturn and pave the way for their long-term recovery.”
“In these times of crisis, now more than ever, our clients need support to successfully overcome all the challenges we face. 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 will begin this important programme to provide small, medium-sized enterprises and mid-caps with 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 has invested over €1.8 billion in the Serbian economy, which has helped retain over 320 000 jobs.