Statement on Signing of Financial Agreement between the Government of the Republic of Serbia, the Government of the Kingdom of Denmark and the National Bank of Serbia

A Financial Agreement between the Government of the Republic of Serbia, the Government of the Kingdom of Denmark and the National Bank of Serbia will be signed on Friday 24 October 2008 at 12:30 p.m. in the press room of the Serbian Government building. Minister of Finance Dr Diana Dragutinovic, NBS Governor Radovan Jelasic and Ambassador of the Kingdom of Denmark Mette Kjuel Nielsen will sign the Agreement.

With the Financial Agreement, the Government of the Kingdom of Denmark will commit a grant of DKK15 million (around EUR2 million) to the Government of the Republic of Serbia for realization of subcomponent 2.3 of the LEDIB programme: Better Access to Favorable Loans. Better Access to Favorable Loans is a subcomponent of the LEDIB programme that supports the Poverty Reduction Strategy and SME Development Strategy in the Republic of Serbia. The programme is implemented in the Nisava county, in the area of construction and textile industry.

A Financial Agreement between the Government of the Republic of Serbia, the Government of the Kingdom of Denmark and the National Bank of Serbia will be signed on Friday 24 October 2008 at 12:30 p.m. in the press room of the Serbian Government building. Minister of Finance Dr Diana Dragutinovic, NBS Governor Radovan Jelasic and Ambassador of the Kingdom of Denmark Mette Kjuel Nielsen will sign the Agreement.

With the Financial Agreement, the Government of the Kingdom of Denmark will commit a grant of DKK15 million (around EUR2 million) to the Government of the Republic of Serbia for realization of subcomponent 2.3 of the LEDIB programme: Better Access to Favorable Loans.
Better Access to Favorable Loans is a subcomponent of the LEDIB programme that supports the Poverty Reduction Strategy and SME Development Strategy in the Republic of Serbia. The programme is implemented in the Nisava county, in the area of construction and textile industry.

This subcomponent relies on the Direct Partnership model as its implementation strategy. This strategy entails that the funds are deposited with adequate financial institutions, which then grant loans from these resources. The deposited funds are either interest-free or a low interest is charged on them.

The loans will be approved by one or two commercial banks that have considerable experience in SME lending. The bank(s) will be selected by public procurement of financial services. It is expected that the bank(s) will increase the contribution of the credit fund of the LEDIB programme with own resources by up to 100%.

Financing from this credit facility will be available for small- and medium-sized enterprises from Nisava county that operate in the construction or textile industry.

The National Bank of Serbia has been credited with the role of the agent that will manage the credit facility. The NBS will accordingly sign formal agreements with the banks, release the funds and monitor the banks’ activities.

The credit facility will be realized in line with the Financial Agreement signed between the Government of the Republic of Serbia, Government of the Kingdom of Denmark and the National Bank of Serbia. The Agreement will be effective up until 31 December 2016.