Hrvatska Postanka Banka has become the first Croatian bank to join the EU/EBRD SME Finance Facility. The EBRD is extending a €10mn loan to the state-owned Croatian bank for on-lending to small and medium-sized enterprises. The loan will be complemented by a €1.4mn grant from the European Commission for technical assistance and performance-based fees.

The expansion of SMEs is critical to the growth and development of the Croatian economy, but to date access to finance is still difficult for many small enterprises.

Hrvatska Postanka Banka is now focusing on this sector and committed to long term and sustainable SME financing. The EBRD’s involvement will not only provide longer-term funding, but will also foster the development of Hrvatska Postanka Banka.

Under the project micro sub-loans of up to €30,000 will be made available to local Croatian companies with less than 10 employees and small sub-loans of up to €125,000 will be provided to companies with up to 100 employees. All sub-borrowers will have majority private ownership and control and be registered and operated locally.

Charlotte Ruhe, EBRD director for Croatia, says the bank welcomes the expansion of the successful SME programme to Croatia. Under the joint facility with the European Commission significant progress in strengthening this key sector has been achieved in many countries. Now also Croatia stands to reap the benefits of the SME sector’s further growth.

“Providing support to SMEs is a key strategy of HPB that will also help strengthen the Croatian economy. We will increase our support for SMEs through the development of new, tailor made programs, developed according to their needs. We believe that with the help of this loan we will become even more accessible to entrepreneurs and make their projects more easily attainable,” states Josip Protega, HPB CEO.

The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of entrepreneurs by facilitating their access to finance. Under the programme, the bank will make available funding of €1.35bn, of which €1.0615bn has been committed to signed projects to date. The EC has contributed €156.75mn in grant financing since the launch of the programme in 1999.