By Bojana Vlajcic

The European Bank for Reconstruction and Development (EBRD) is extending a €5 million(US$5.8million) loan to Erste Bank Serbia to support the competitiveness of small and medium-sized enterprises (SMEs) in the country.

The funding, which will be channelled by Erste Bank to local SMEs, will support local small businesses to reach best industry standards and implement European Union (EU) directives. The aim is to encourage SMEs to invest in upgrades in three key areas: environmental protection, health and safety and product quality.

Participating SMEs will also have access to tailor-made advice and know-how for introducing and implementing standards and directives to make them more competitive in EU markets. They will also benefit from grant incentives worth up to 15 per cent of the total loan amount on successful project completion. Advisory support and grants are both funded by the European Union.

The credit line is part of a wider EBRD-EU initiative, which encourages SMEs across the Western Balkans to invest in projects that improve their competitiveness in local and external markets.

The programme is implemented in cooperation with the Ministry of Economy of Serbia. In close coordination with the Ministry of Economy, the European Union has approved an additional €10 million in Instrument for Pre-Accession Assistance (IPA) funding for the EBRD’s SME Competitiveness Programme in the country.

EBRD Director, Financial Institutions, Western Balkans and Eastern Europe, Aleksandra Vukosavljević said: “We are very pleased to step up our support for SMEs in Serbia together with our long-standing partner Erste Bank Serbia. The new funding will facilitate access to well-structured finance for small businesses, helping them to become more competitive and allow them to integrate better into regional and European value chains.”

Chairman of the Executive Board of Erste Bank Serbia, Slavko Carić stated: “Small and medium-sized enterprises are the growth engine of economic development and therefore we are very glad that, thanks to the partnership with the European Bank for Reconstruction and Development, we will be able to provide them with easier access to finance in order to improve their business. Funds from this credit line are intended for existing and potential clients who want to harmonize their products and services with the standards of the European Union and implement EU directives, which will enable them to be competitive in that market as well. “

Head of the EU Delegation to Serbia, Emanuele Giaufret stated:  “EU-funded projects in Serbia promote job creation, economic and technological development and legislative framework improvement, all of which contribute to an improved economic landscape. The businesses themselves of course also benefit from our assistance and this programme is just another proof of this since it is  boosting SME competitiveness and trade capacity through compliance with priority EU Directives  in environmental, occupational health and safety as well as product quality and safety standards. We are glad to be partnering with the banks to empower the businesses and to help them to access capital.”

Erste Bank Serbia is a fully owned subsidiary of Erste Bank Group. The bank sees serving the SME sector as a strategic target in creating sustainable growth.

The EBRD is a leading institutional investor in Serbia. The Bank has invested more than €6.9 billion across 293 projects in the country to date. The EBRD is focusing on private-sector development, improving public utility services and the overall transition to a green economy.