Investment and working capital loans guaranteed by the International Finance Development Corporation (DFC) from the U.S. could be available to Serbian SMEs by mid-year. The guarantee scheme, in the amount of about one billion dollars, will be agreed by the end of the first quarter, and by the end of the second quarter, it could be available to commercial companies and banks.
This was announced by Siniša Mali, Serbian Minister of Finance, after the signing of the Interstate Agreement on Investment Promotion, which is a prerequisite for the DFC to start its activities (which opened an office in Belgrade in September) and the confirmation of the validity of the Washington Agreement, signed in September.
Ljubodrag Savić, professor at the Faculty of Economics, says that ten-year loans are a good thing because businesses in Serbia do not have such favourable loans with a long repayment period at their disposal.
“I don’t know whether a bank in Serbia grants business loans with a five-year repayment period. I think the longest they give is one or two years. This first element of the deal is good because if it is a long-term loan, the interest rate should be low. However, we still don’t know what guarantees would be needed and whether the state will have to guarantee the repayment of these loans,” says Savić.
Professor Savić also underlines that the problem of Serbian companies is that very few of them have quality mortgages, and this problem refers mainly to small and medium-sized enterprises. According to his assessment, this is a positive development for the state and the Serbian economy, because it is always better to have more sources of financing.
“When there are more possibilities, this can also positively affect the banks. Investing a billion dollars in the Serbian economy is not a small fete. The American fund has a lot of money, and if everything goes as it should, who says that those funds will not be increased!?” adds Savić.
When asked if he expects the new US administration to continue to consistently implement the Washington agreement, Savić said that Biden announced that he would reconsider Trump’s policy, that he would have a different policy towards Europe and towards global agreements, and that he intends to build different political and economic relations.
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