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Add to Preferred SourcesThe Administrative Council of the Council of Europe Development Bank (CEB) approved a €200 million loan to the Croatian Bank for Reconstruction and Development (HBOR) to provide financing to micro, small and medium-sized enterprises (MSMEs) and also support infrastructure development projects.
MSMEs play an important role in the Croatian economy, as they make a significant contribution to job creation and have a positive impact on economic growth. Nevertheless, limited access to long-term financing, due to the scarcity of funds and tighter credit conditions, remains an obstacle to their development and further growth. At a time when Croatia is facing a shrinking labor force, owing to an aging population and a large number of skilled workers who have left the country, MSMEs can boost employment and foster economic recovery.
The funds provided by the CEB will be on-lent by HBOR to Croatian MSMEs to provide flexible, long-term and competitive financial resources for their productive investments. This is expected to strengthen the competitiveness of the sector and stimulate the creation and preservation of viable jobs. Emphasis will be placed on the lower segment of the Croatian market, to provide equal financing opportunities to smaller-sized MSMEs who traditionally tend to have more limited access to funding.
The CEB loan will also be used for the financing of social investments by local public authorities, whose respective budgets have been affected by strict fiscal tightening measures in recent years. The funds provided by the CEB will support the municipal sector in further developing and upgrading public infrastructure, which in turn will raise living standards and strengthen sustainable economic development. The project should cover a wide range of priority social projects such as the construction and renovation, including energy efficiency improvements, of kindergartens and primary schools, the construction and fit-out of care homes, and investments related to sewerage and wastewater treatment facilities.
Original source: CEB
Published on 18 March 2019