Micro-Loans with EU Support
Loan Programme for the Financing of Micro-Entrepreneurs This Programme benefits from a guarantee issued under the European Community’s Competitiveness and Innovation Framework Programme
The Loan Programme for the Financing of Micro-Entrepreneurs has been designed and is implemented in co-operation with the European Investment Fund (EIF) and the European Union within the framework of the Competitiveness and Innovation Programme (CIP) – Micro Loan Guarantee Facility for the Financing of Micro-Entrepreneurs (EIF’s CIP Guarantee).
Loans are approved in HRK and indexed to foreign currency.
The Loan Programme for the Financing of Micro-Entrepreneurs has been designed and is implemented in co-operation with the European Investment Fund (EIF) and the European Union within the framework of the Competitiveness and Innovation Programme (CIP) – Micro Loan Guarantee Facility for the Financing of Micro-Entrepreneurs (EIF’s CIP Guarantee).
1. Goal of the Loan Programme and Purpose of the Loans
The goal of the Programme is the financing of micro-entrepreneurs for the purpose of:- self-employment
- establishment of crafts businesses and companies
- modernisation and expansion of existing businesses
- increase in the number of new jobs
- fixed assets (initial funding, land plots, buildings, equipment and devices, nucleus breeding units, planting of perennial crops, development of products or services, patents, licences, concessions, copyrights, franchises),LI>
- working capital
2. Borrowers
Borrowers are commercial banks that have entered into a cooperation agreement on the implementation of the Programme with HBOR. Final borrowers can be private micro-entrepreneurs, natural persons or legal entities that meet the following criteria on the day of loan application submission:- less then 10 employees
- annual operating income of up to EUR 2 million equivalent value, or balance sheet total (for corporate income tax payers) or long-term assets (for personal income tax payers) of up to EUR 2 million equivalent value
- up to 25% stake owned by a company that is not considered an SME in accordance with the EU criteria
3. Manner of Financing and Loan Application Procedure
HBOR implements this Programme by financing final borrowers via commercial banks that have accepted co-operation on the implementation of this Programme. Loan applications are submitted by final borrowers to commercial banks that have accepted co-operation on the implementation of the Programme with HBOR. The Loan Programme is implemented through the loss sharing model where HBOR’s share in the loss equals 70% and that of the commercial bank 30%.4. Loan Amount and Repayment
Micro-loans The maximum amount of a micro-loan in HRK equivalent value is EUR 25,000.00. The entire amount of the loan can be used for investment in fixed assets and/or working capital. VAT is not eligible to be financed. HBOR can, in certain cases, consider a possibility of financing the estimated investment value with VAT.| Grace period | up to 1 year |
| Repayment period | up to 5 years, grace and disbursement periods included |
| Minimum repayment period | 1 year |
5. Interest Rate
The interest rate paid by the commercial bank to HBOR is 2,0 % p.a. The interest rate for the final borrower is determined by the commercial bank depending on the assessment of the risk associated with the placement, about which it is obliged to inform HBOR. Interest rate is variable pursuant to a decision made by HBOR’s Managing Board in accordance with the criteria contained in HBOR's Decision on Interest Rates with the Interest Calculation Regulations.6. Fees
Loan application fee for final borrowers:- 0,5 % one off, on the committed loan amount
- charged on or before the first disbursement
- calculated quarterly in the amount of 0.25% p.a. on the committed and undisbursed loan amount, starting 30 days after the date of the loan contract
7. Loan Disbursement
The final borrower negotiates the disbursement period with the commercial bank. Final borrowers are obliged to use the loan funds for the prescribed purposes in accordance with the provisions of this Loan Programme. Commercial banks are obliged to monitor whether the loan funds are used properly by final borrowers. HBOR reserves the right to verify the proper utilisation of loan funds. Commercial banks and final borrowers are obliged to obtain and keep the documentation and to maintain the records that allow fast and efficient verification of proper utilisation of loan funds. HBOR disburses loan proceeds to the commercial bank at its request, submitted on the prescribed form. The commercial bank is obliged to on-lend the funds promptly to the final borrower as follows:- in case of investment in fixed assets, the commercial bank is obliged to transfer the funds approved for the final borrower directly to suppliers or contractors on the basis of the relevant documentation;
- in case of investment in working capital, the commercial bank may transfer the funds approved for the final borrower either directly to suppliers or to the final borrower's account for the purpose of allowing the final borrower to effect the payments itself.
8. Security
For the purpose of securing due fulfilment of loan obligations, the commercial bank takes debentures from the final borrower. Depending on the assessment made by the commercial bank, it may also take bills of exchange and create a lien on property, but only on that purchased from the proceeds of the loan.9. Miscellaneous
The provisions of HBOR's State Aid Regulations, HBOR’s Regulations on Basic Terms and Conditions of Financing Primary Agricultural Production, HBOR’s Decision on General Terms and Conditions of Lending Activities, the General Terms and Conditions of Insurance of HBOR’s Placements, HBOR's Decision on Interest Rates with the Interest Calculation Regulations, the Decision on Fees for HBOR Services with the Fee Calculation Regulations as well as provisions of other HBOR documents and decisions made by HBOR bodies in charge shall apply to all matters that are not regulated by this Loan Programme.10. De Minimis State Aid through EIF’s CIP Guarantee
HBOR uses the EIF’s CIP guarantee to cover its share in the loss under every loan approved. Therefore, HBOR is obliged to ensure that the inclusion of the loan into the portfolio of the EIF’s CIP guarantee is in compliance with the following de minimis state aid regulations with regard to each individual final borrower:- Commission Regulation (EU) No. 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (OJ L 352, 24.12.2013) or
- Commission Regulation (EU) No. 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agriculture sector (OJ L 352, 24.12.2013) if the final borrower is an entrepreneur who is active in the primary production of agricultural products.
11. Documentation
The commercial bank determines the documentation in accordance with its procedures. The completed Statement on State Aid, which can be found on HBOR’s web pages, has to be obtained from the final borrower by the commercial bank.12.List of Commercial Banks Co-operating with HBOR on the Loan Programme:
- BKS Bank AG, Rijeka Main Branch Office
- Croatia banka d.d., Zagreb
- Erste & Steiermärkische Bank d.d., Rijeka (RS)
- Hrvatska poštanska banka d.d., Zagreb (RS)
- Kentbank d.d., Zagreb
- OTP banka Hrvatska d.d., Zadar (RS)
- Partner banka d.d., Zagreb
- Podravska banka d.d., Koprivnica (RS)
- Raiffeisenbank Austria d.d., Zagreb (RS)
- Sberbank d.d., Zagreb (RS)
- Slatinska banka d.d., Slatina (RS)
- Veneto banka d.d., Zagreb