After having obtained approvals from the European Commission, HBOR has, under the COVID-19 measures, increased the coverage for liquidity loan portfolio insurance and reduced the requirement of minimum share of export revenues in order to make the measure accessible to as many entrepreneurs as possible. Liquidity loan portfolio insurance coverage rose from the current 50% to 90%, and the requirement of minimum share of export revenues decreased to 10% (from the previous 20%). For all indirect exporters, i.e. exporters’ suppliers, can use this insurance if they generate at least 20% of revenues from sale to exporters (previous requirement: 40%). This insurance possibility can be used by entrepreneurs for loans approved through 13 banks. In addition, a possibility of subsidising insurance premium cost was also introduced.
HBOR assumes up to 90% of repayment risk of liquidity loans
Programme for the Insurance of Exporters’ Liquidity Loan Portfolio enables simple and fast approval of loans because the banks, as the insured, can include, in accordance with the in advance agreed terms and conditions, the liquidity loans approved to exporters and indirect exporters into the loan portfolio, for which HBOR has now assumed up to 90% of repayment risk.
Reduction in required minimum share of export revenues to 10% for exporters and to 20% for indirect exporters
Under this programme, exporters are defined as business entities having generated at least 10% of their operating income from export revenues in the latest business year, for which official financial statements are available, whereas indirect exporters are defined as business entities who have generated at least 20% of income from sale to exporters. Loans of a borrower’s double annual expenditures for salaries or loans of up to 25% of a company’s total income in 2019 any can be included into the insured portfolio.
Banks approved more than HRK 1 billion in liquidity loans to entrepreneurs covered by HBOR’s insurance
“In addition to the fact that, in 2020, HBOR approved almost HRK 1.3 billion in loans under the COVID measures, owing to HBOR’s loan portfolio insurance, banks approved more than HRK 1 billion in liquidity loans to entrepreneurs. By subsidising the costs of insurance premiums, we will reduce the costs of financing for entrepreneurs, and I believe that a significant increase in the share of risk that HBOR assumes will further encourage banks to approve loans and help preserve the liquidity of our entrepreneurs and jobs,” said Tamara Perko, President of HBOR’s Management Board.
Furthermore, for entrepreneurs and loans to which loan portfolio insurance model for exporters’ liquidity cannot apply, the possibility of approving individual loan insurance has been introduced.
Subsidy for loan insurance premium costs
Exporters and indirect exporters, who have not reduced the number of employees by more than 20% (large entrepreneurs) or by more than 50% (small and medium-sized entrepreneurs) in the period from 31 March 2020 to the last day in the month preceding the application submission date and who have no overdue liabilities with respect to public dues, can make use of insurance premium subsidy.
As the above terms and conditions of the insurance programme are more favourable than the market ones, HBOR had to request approval from the European Commission for the implementation of these programmes under the COVID-19 measures having been approved until 30 June 2021.