Officials of the Croatian Bank for Reconstruction and Development (HBOR) and the European Investment Fund (EIF) on Monday signed an agreement based on which Croatian entrepreneurs will be given guarantees for more favourable bank loans, and this is the first project in Croatia granted under the so-called Juncker plan.

Guarantees will be given within the InnovFin programme, a guarantee facility for small and medium entrepreneurs of the Investment Plan for Europe (the so-called Juncker plan), as of September this year and they will be issued over a period of two years.

The signatories to the agreement expect that this kind of support to innovative Croatian businesses will generate investments in Croatia in the amount of EUR 20 million or HRK 150 million.

EIF deputy executive director Roger Havenith said after the signing ceremony that the programme was intended for small and medium entrepreneurs, a vital element of Europe's economic eco-system.

HBOR Management Board deputy chair Dusan Tomasevic said this was a first-class facility that would enable more favourable financing for micro, small and medium entrepreneurs and mid-cap entrepreneurs with up to 500 employees. Depending on a business's size, the guarantee facility will enable the lowering of interest rates by around 0.4 and 0.5 percentage points and HBOR credit lines, which are now approved at an interest rate of 2, 3 or 5%, will become even more favourable for them, said Tomasevic.

SMEs Minister Darko Horvat said that with this guarantee facility Croatia was approaching the goal of enabling its entrepreneurs to obtain capital under the same conditions and at the same price as all the other European entrepreneurs.

Loans to entrepreneurs with interest rates of 0.5% or 1.5% will thus become a reality in Croatia as well, Regional Development and EU Funds Minister Tomislav Tolusic said, adding that entrepreneurs would be able to apply also for money from EU structural funds.

He said that the Croatian Agency for SMEs and Investment (HAMAG BICRO) was preparing a programme for accessing cheaper funding, and that his ministry would soon publish three tenders for money from EU structural funds, which would put the total amount of available funds at around HRK 1.5 billion.

The signing of the agreement was also attended by Commission for International Cooperation and Development Neven Mimica, who said that programmes like this were crucial for the functioning of small and medium businesses and job creation in Croatia and the EU alike.

Juncker's plan was a necessity because investments in the EU at the time of the crisis had dropped by around 300 billion euros compared to the historical average and the purpose of the plan was to encourage, over a period of three years, around 315 billion euro worth of investments in strategic areas in the EU - energy, transport, broadband Internet, research, innovation and health. In the first year, 78 projects were approved with around EUR 106 billion investments in 26 member-states, so the plan is yielding results, said Mimica.

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