FBiH Government: KM 200 Million for Two Credit-Guarantee Programs

(Patria) - The Government of the Federation of BiH, upon the proposal of the Federal Ministry of Energy, Mining and Industry, has adopted two credit-guarantee programs: one for exporters, and the other for large companies.

For each program, the total amount of guarantees to be issued by the Development Bank of FBiH at the expense of the Guarantee Fund amounts to KM 100,000,000, reduced by the amount of guarantees issued by May 31, 2021, under this credit-guarantee program. The total amount of the Fund's guaranteed obligations to one entrepreneur or a group of related entrepreneurs cannot exceed KM 5,000,000, and the Fund's guarantee for an individual loan amounts to 50 percent of the loan principal, but no more than KM 3,000,000.

The main goal of the program is to provide support to business entities in conditions of difficult operations by strengthening their credit potential.

Fund guarantees in accordance with these programs can be issued for loans intended for financing current assets (loan repayment period up to 60 months, including a grace period of up to 12 months) and/or for financing fixed assets (repayment period up to 120 months, including a grace period of up to 24 months, and up to 30 percent of the approved loan structure can be for financing current assets).

Current assets include financing of current liquidity (salary payments, tax and contribution payments, etc.) and financing of working capital (payments to suppliers, procurement of raw materials, inventory, etc.).

Fixed assets include long-term financing for the procurement of equipment, and construction and renovation of facilities, with the aim of launching new business activities and growth and development of existing ones, increasing competitiveness, developing and introducing innovations, and new employment (if related to a new investment).

The credit-guarantee programs for exporters and large companies will be applied from June 1, 2021.