Business News

Govt Endorses Loan Guarantee Scheme for Development Projects

Ljubljana, 06 May (STA) - The government on Thursday endorsed a bill providing EUR 1bn in state guarantees for corporate lending in a bid to boost liquidity and help companies squeezed by the credit crunch to fund development projects.

Development projects raise added value and create jobs, Finance Minister Franc Krizanic said at a press conference after a government session.

According to the bill, individual loans will range from EUR 500,000 to EUR 20m with the maturity of one to ten years.

Guarantees will be issued by the state-owned SID development and export bank, while applications will be reviewed by a special government commission.

The state will take upon itself 75% of the loan risk, while the bank will shoulder the remaining 25%.

Certain projects will however be excluded from the scheme, Krizanic said, highlighting the construction of properties for rent or sale, investments in transport infrastructure and extensions of loans.

Ailing companies and firms mainly offering financial services will also be excluded.

The government intends to fast-track the bill through parliament so that guarantees will be available in September. The measure will be a follow-up to the loan guarantee scheme for companies and cooperatives, which entered into force last May.

As part of the first loan guarantee scheme, worth EUR 1.2bn, a total of EUR 645m was auctioned off. The state has taken upon itself an average of 34% of the loan risk.

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