Factsheet for case EE-2020-13/347 – Updated – measures in Estonia
|Country||Estonia , applies nationwide|
|Time period||Temporary, 27 March 2020 – 31 December 2020|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Ingel Kadarik (Praxis Center for Policy Studies) and Eurofound|
|Case created||07 April 2020 (updated 06 January 2021)|
Due to the outbreak, several companies are in a difficult position financially to continue providing their services/products, to pay their loans or to start a new business (for example, opportunities created by the corona outbreak). For this purpose, the state provides additional funds to Kredex (a state founded foundation) and Rural Development Fund to provide support measures to companies in a form of loans and loan guarantees. On a smaller scale, those measures are already available and relevant instructions for the applicants and terms and conditions of the measures have been approved by the Kredex at the end of March 2020, but additional government finances are needed for the full provision of these measures. For this, the supplementary state budget was approved by the Parliament on 15 April 2020.
Kredex, the Credit and Export Guarantee Fund (state founded foundation), provides loans and loan guarantees to companies. To relieve the impacts of the COVID-19, KredEx offers additional loan guarantees and loans:
The guarantee enables a company to secure the obligations of an enterprise, arising from loan, leasing and guarantee contracts.
Requirements to be eligible:
Specific conditions by type:
The validity period of the guarantee is 72 months; the loan period is 6-72 months. The guarantee can be issued and amended until 31 December 2020.
For agriculture, fishing and food industry companies, similar measures are provided by the Rural Development Fund . The total amount of the funding is €200 million.
The maximum loan amount for single-applicants is up to €1 million, if the loan is taken together with a credit or financing institution, the maximum amount is €2 million. The interest rate is from 2% and fixed for 2 months. The loan period is up to six years, in case of investment loans - ten years. At least 30% of the loan must be guaranteed (e.g. real estate, surety or other). Loan applications are accepted until 23 December 2020.
In case of loan guarantee, similar to Kredex measure, the total amount of the loan to be guaranteed cannot exceed double the salary cost of the company for 2019 with social tax, 25% of the company's turnover in 2019 or a justified 18-month liquidity requirement for an SME or a justified 12-month liquidity requirement for a large company. Up to €5 million is guaranteed, but not more than 90% of a proportionally guaranteed loan or 35% of a fixed guaranteed loan. The length of the guarantee is up to six years.
Kredex: data available here
By 14 December 2020, 139 companies received a loan in the total amount of €220.1 million (the largest sum was €100 million per one company). 293 companies' loans were guaranteed in the total sum of €58.6 million.
Rural Development Fund: data available here
By 23 December 2020, 146 applications for guarantees in the amount of €48.4 million and 372 applications for loans in the amount of €157 million were received. 133 guarantee (€40.2 million) and 303 loan (€84.4 million) decision were made and altogether 375 contracts were signed (total amount €101.7 million).
|Does not apply to workers||Applies to all businesses||Does not apply to citizens|
Public support service providers
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Role||No involvement as case not in social partner domain||Consulted|
|Form||Not applicable||Any other form of consultation, institutionalised (as stable working groups or committees) or informal|
Social partners' role in the implementation, monitoring and assessment phase:
In addition to the sectoral business association, the Estonian Employers Confederation was consulted during the design of the measure. The possibility to give feedback was open to all interested parties. Trade unions did not participate in the consultation process due to the nature of the measure.
Peak-level employers organisation and sectoral business organisations have been partially in agreement with the measure, stating that while overall the measure is necessary, numerous restrictions of the measure hinder the accessibility of the measure.
Eurofound (2020), Emergency loan and loan guarantee, case EE-2020-13/347 (measures in Estonia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.