Background information

Very often entrepreneurs complain on the unfavorable loan and high interest rates. Under the National Recovery and Resilience Plan (NRRP), Croatian Bank for Recovery and Development (Hrvatska banka za obnovu i razvoj – HBOR) started the implementation of financial instruments that provide extremely favorable loans for investments of private and public sector entities. Direct loans under the NRPP will be available to start-up entrepreneurs (up to 3 years of operations), young entrepreneurs (up to 40 years), companies owned and/or managed by women, entrepreneurs investing in special areas of the Republic of Croatia (assisted areas in accordance with the development index , mountainous areas and islands) and entrepreneurs investing in the commercialisation of research, development and innovation-based projects (RDI projects).

Content of measure

Loans will be approved without charging the loan application processing fee and without charging the commitment fee, whereas the repayment period will be up to 15 years, which includes the possibility of a grace period of up to 3 years. HBOR will enable a significant reduction in interest rates for business entities of all sizes both in the private and public sectors under its existing investment finance programs: Private Sector Investment, Public Sector Investment and Youth, Female and Start-Up Entrepreneurship. For investments in green or digital transition projects, the interest rate charged to the borrowers can be reduced by up to 75%; for investments in special areas of the Republic of Croatia, including public sector investments in earthquake recovery, and investments in RDI projects by up to 65%, whereas for other investments that increase competitiveness and resilience by up to 50%.

The interest rate for a beneficiary of HBOR’s direct loan investing in a green transition project of its manufacturing company under the Private Sector Investment project would be, for example, 0.375% instead of the current 1.5%. This interest rate can be further reduced depending on the area of investment (thanks to subsidies from individual Local and Regional Government Units) and if the company employs a young person under 30. When a loan is approved by a commercial bank or a leasing company, the interest rate determined for an individual project is reduced in the same manner, thus providing entrepreneurs with a significant reduction in interest rates. Loans from commercial banks and placements of leasing companies with a subsidy from the NRRP funds will be available after conclusion of an appropriate agreement between HBOR and commercial banks, i.e. leasing companies. Until then, interested entities can apply for a loan directly in HBOR.

Use of measure

Unknown.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	European Funds National funds National Recovery and Resilience Facility

Social partners

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	No involvement as case not in social partner domain
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: N/A

Involvement

Due to the nature of the measure, social partners were not involved.

Views and reactions

Although social partners were not involved, the representatives of the Croatian Employers' Association fully support any kind of aid in achieving better financial possibilities.

Sources

• 27 May 2022: Povoljniji krediti za zelene i digitalne poslove (Favorable loans for green and digital jobs)
• 27 May 2022: Operativni program za izravne kredite (Operative Program for Direct Loans) (www.hbor.hr)