Jelisaveta Janić • apr 28, 2020
ECONOMIC MEASURES OF THE GOVERNMENT OF REPUBLIC OF SERBIA AS A SUPPORT TO THE ECONOMY – ADOPTED ECONOMIC MEASURES PROGRAM FOR PRIVATE SECTOR
In order to eliminate negative consequences of the COVID-19 pandemic, Government of the Republic of Serbia has adopted the Regulation on establishing Economic Measures Program for private sector for preservation of liquidity in difficult conditions caused by the Covid-19 pandemic (,,Official Gazette RS” no 54/20), for preserving the stability of the financial system.
Economic Measures Program for private sector for preservation of liquidity in difficult conditions caused by the Covid-19 pandemic stipulates the conditions and method of granting loans to the business entities, as support for the acquisition of the working assets and preservation of current liquidity, in order to regularly settle obligations to business partners.
Program is maintained by the Government of the Republic of Serbia in cooperation with Development Fund.
The purpose of the obtained funds is limitedand they ne mogu koristiti zacannot be used for: organization of games of chance, lotteries and similar activities, trade in oil and petroleum products, production and marketing of any products or activities which are considered to be forbidden by domestic regulations or international conventions and agreements.
In the text bellow you may find information who has right to the credit funds, conditions which should be fulfilled by legal entities in order to be entitled with funds, conditions for concluding the agreements, security instruments and submitting the request.
I Who can apply for the funds?
Regulation is applicable to entrepreneurs, cooperatives, micro, small and medium companies, which are in majority in private or cooperative ownership, and which perform production, service, trade and agricultural activity.
Legal entities which are interested are obliged to deliver the official regular financial statements for previous two years (except undergone the entrepreneurs who do not have this obligation).
Cooperatives can apply for loan if they have their acts, authorities and activities harmonized with the Law on cooperatives (“Official Gazette RS” no 112/15), and if they had a cooperative audit in the last two years.
II Which conditions should be fulfilled by the interested legal entities?
Applicants must not face difficulties,i.e. they must not be the subject of the bankruptcy procedure, procedure of deciding on the Pre-Prepared Reorganisation Plan or liquidation procedure. Also, legal entities with the Pre-Prepared Reorganisation Plan, Reorganisation Plan or financial restructuring measures in effect cannot apply for the funds.
For business entities who decide to use the benefits from the Regulation, payment of dividend at any time until the end of 2020 is forbidden..
The borrower is obliged to provide the RS Development Fund and the RS Export Insurance and Financing Agency a.d. Uzice with control and access to the documentation necessary for a fuller examination of the request and control of the intended use of credit funds, in the period from the submission of the request until the expiration of three years from the conclusion of the agreement.
III What are the conditions for credit allocation?
Credit shall be allocated under the following conditions:
- repayment period up to 36 months, including the 12 months grace period (total loan duration is up to 12 months grace period and 24 months repayment period;
- interest rate of 1% annually;
- loans will be approved and returned in Serbian dinars (RSD);
- minimal amount of the loan for one user with related parties for the companies is RSD 1.000.000,00,
and for the entrepreneurs, cooperatives and business entities registered in relevant authority RSD 200.000,00;
- maximal amount of the loan for one user with related parties is RSD 10.000.000,00 for entrepreneurs and micro companies, RSD 40.000.000,00 for small companies and RSD 120.000.000,00 for large companies;
- repayment shall be made monthly;
- interest will be calculated in grace period and will be added to the principal amount;
- business entitymust not reduce the number of employees for more than 10% in the period from March 15, 2020 to until the expiration of three months from the day of releasing of funds to use (except the part-time employees).
IV What are the security instruments for orderly repayment of the loan?
Security instrument depends on the loan amount:
- up to the amount of RSD 1.000.000,00 – bills of exchange issued by the borrower and personal bills of exchange issued by the founder;
- up to the amount of RSD 2.000.000,00 – bills of exchange issued by the borrower, personal bills of exchange issued by the founder and guarantee given from the private individual full-time employed;
- up to the amount of RSD 10.000.000,00 – bills of exchange issued by the borrower, personal bills of exchange issued by the founder and guarantee given from the related legal entity;
- up to the amount of RSD 25.000.000,00 – bills of exchange issued by the borrower, personal bills of exchange issued by the founder and guarantee given from the solvent legal entity which is not related to the borrower;
- for the amount higher than RSD 25.000.000,00 – bills of exchange issued by the borrower, pledge on the borrower’s equipment or pledgor and/or first rank mortgage.
Guarantee from the bank, pledge on movable property and mortgage may be security instruments for all the amounts of the loan, while the guarantee of the solvent legal entity (which is not related party) may be security instrument for the amount of the loan up to the RSD 25.000.000,00.
V When is the deadline for applying and how to submit the request?
The deadline for submitting the request is December 10, 2020, and the requests will be received until there are funds available prescribed by the Program. RSD 24.000.000.000,00 has been set aside for the implementation of the Program. Having in mind the above mentioned, if a business entity chooses to apply for a grant, it is advisable to do so as soon as possible.
Application and needed documentation shall be submitted via e-mail: email@example.com.
Also, business entities, beside the application, are obliged to submit the following documentation, such as related party statements, bank certifications, statements of assets, etc.
Application forms and detailed list of documentation can be found on the site https://fondzarazvoj.gov.rs/lat/proizvodi/likvidnost-covid19.