FBiH Government: Loans up to KM 300,000

(Patria) - The Government of the Federation of BiH, at today's session in Sarajevo, adopted programs of three federal ministries that enable businessmen to use funds from the Guarantee Fund opened with the Development Bank of FBiH. These are the Federal Ministries of Development, Entrepreneurship and Crafts, Energy, Mining and Industry, and Agriculture, Water Management and Forestry. The goals of these credit-guarantee programs are, in conditions of difficult business operations due to the coronavirus pandemic, to provide support to businessmen who have problems accessing credit funds for maintaining necessary liquidity, maintaining the existing level of employment, and creating new jobs.

Two programs fall under the jurisdiction of the Federal Ministry of Development, Entrepreneurship and Crafts: one is intended for craftsmen and other independent business activities, and the other for micro, small and medium-sized enterprises.

The total amount of guarantees under the Program for Craftsmen and Other Independent Business Activities is KM 50,000,000. Loans for which guarantees can be issued within this program are for liquidity, working capital, investments, and short-term loans, and in all four cases, the loan amount is up to KM 300,000.

Regarding the Program for Micro, Small and Medium-sized Enterprises, the total amount of guarantees is KM 150,000,000. Within this program, loans amount to up to KM 1,250,000 and are intended for maintaining liquidity, working capital, investments, and short-term purposes. The Fund's guarantees are initially intended, for a period not exceeding 12 months from the date of declaring the end of the disaster caused by the COVID-19 pandemic, to strengthen the credit potential of craftsmen and other independent business activities, as well as micro, small and medium-sized enterprises to ensure financing sources in order to mitigate the negative effects caused by the COVID-19 pandemic on the economy of FBiH and create conditions for sustainable economic growth and employment.

The goal of the program is to preserve liquidity, the existing level of employment, and create new jobs, by ensuring easier access to credit funds. At the proposal of the Federal Ministry of Energy, Mining and Industry, the Government adopted two credit-guarantee programs - for large enterprises and for exporters, and the total amount of available funds for each of them is 100 million KM. Large enterprises, according to the Law on Accounting and Auditing in FBiH, are considered those that, on the date of preparation of financial statements, meet at least two of the three prescribed conditions: that the average number of employees during the year is greater than 250, that the average value of business assets at the end of the business year exceeds KM 4,000,000, and that the total annual revenue exceeds KM 8,000,000.

The Program for Exporters states that any business company that has encountered business difficulties as a consequence of the pandemic caused by the COVID-19 virus and which generated at least 30 percent of export revenue in the business revenue of the previous financial year for which the company's official annual financial reports are available can be a beneficiary.

At the proposal of the Federal Ministry of Agriculture, Water Management and Forestry, the Credit-Guarantee Program for Agriculture and the Food Industry was adopted. The total amount of guarantees under this program, which will be approved by the Development Bank of Bosnia and Herzegovina from the Guarantee Fund, amounts to KM 100,000,000 and can be issued no later than May 31, 2021.

Common to the programs of all three federal ministries is that Fund guarantees can be issued for loans with a maturity of up to 60 months, including a grace period of up to 18 months for long-term loans, which are intended for financing current liquidity (payment of gross wages, current operating costs, etc.) from the date of declaration of the state of emergency, i.e., from March 17, 2020, then working capital, completion of already started investments before the declaration of the state of emergency, as well as smaller investments.

Guarantees cannot be issued for loans intended for the purchase of land and business premises, business shares or stocks, financing of transactions between the borrower and persons connected to them, and refinancing of existing credit obligations based on financial leasing. Fund guarantees issued after the expiration of the 12-month period from the declaration of the end of the disaster caused by the pandemic, i.e., after May 31, 2021, will be directed towards supporting the launch of new, growth and development of existing business activities, increasing competitiveness, innovation, and additional employment, for which new programs will be adopted.