The European Bank for Reconstruction and Development (EBRD) has set up a €70mn risk-sharing framework facility for agricultural financing in Serbia which includes a €20mn sub-loan to Société Générale Serbia.
This is the first such facility to be launched in the country, and aims to improve access to funding for agribusinesses and promote the use of warehouse receipts.
The €70mn facility will be used to finance seasonal working capital needs of Serbian agricultural companies through participating partner banks.
The facility will support Serbian banks in extending financing to local agribusinesses using warehouse receipts as collateral, demonstrating the viability of lending against agricultural commodities.
The first loan extended under the new framework is a €20mn loan to Société Générale Serbia.
“The warehouse receipt financing is a great opportunity to help agricultural producers who are currently underserved by the banking system because they lack standard collaterals,” says Zdravko Krunic, member of the executive board, Société Générale Serbia.
“The agreement will enable Société Générale Serbia to provide this inventive financial product to agribusinesses and thereby enable them to time their sale for optimal returns. We hope this product will contribute to the further development of the Serbian agricultural system.”
Agriculture is one of the key sectors of the Serbian economy, and the country is the largest grain producer in the region.
The implementation of a warehouse receipt system in Serbia is currently ongoing. By the end of 2010, Serbia is targeting to achieve a storage capacity in public licensed warehouses of 600,000 tonnes.
The EBRD has already successfully implemented similar projects in Bulgaria, Slovakia, Lithuania, Kazakhstan, Croatia, Ukraine, Russia and Romania. With this latest project, the EBRD’s committed investment in Serbia reaches €1.8bn.
Last Updated July 27, 2010
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