Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HR-2020-12/319 – Updated – measures in Croatia
Country | Croatia , applies nationwide |
Time period | Temporary, 19 March 2020 – 31 December 2020 |
Context | COVID-19 |
Type | Legislations or other statutory regulations |
Category |
Supporting businesses to stay afloat
– Access to finance |
Author | Predrag Bejakovic (IJF) |
Measure added | 06 April 2020 (updated 08 November 2021) |
In order to mitigate the negative effects of the COVID-19 (coronavirus) pandemic, and following the first set of measures adopted by the Croatian Parliament on 19 March 2020, Croatian Bank for Reconstruction and Development (HBOR) and Croatian Agency for SMEs, Innovation and Investment (HAMAG-BICRO) announced implementation of new measures to preserve the level of economic activity, the liquidity of economic operators and, most importantly, to preserve jobs. Measures include possibility for entrepreneurs to introduce a moratorium and to reprogram their existing credit obligations to HBOR as well as easier approval of favorable liquidity loans in cooperation with commercial banks.
The following measures are implemented through the Croatian Bank for Reconstruction and Croatian Agency for SMEs, Innovation and Investment (HAMAG-BICRO):
The following updates to this measure have been made after it came into effect.
02 October 2021 |
Within the framework of COVID-19 Measures, favorable loans by the Croatian Bank for Reconstruction and Development (CBRD) for liquidity financing were also made available to entrepreneurs. Loan Programs under COVID-19 Measures were implemented in cooperation with commercial banks or directly for entrepreneurs from certain activities. In 2020, CBRD approved several times larger amount of direct loans than in previous years, and the majority of these loans were approved under COVID-19 Measures. However, considering the CBRD’s limited capacities, cooperation with commercial banks was crucial in this period, because the banks are much better informed on clients and their operations. Under the Program within COVID-19 Measures, financial resources from CBRD were approved with a very favorable interest rate of 0% and with no usual fee charges. During 2020, the Working Capital Program under COVID-19 Measures was implemented through 15 commercial banks and directly for loan amounts exceeding HRK 37 million (€4.9 million). Of this amount, HRK 10 million (€1.3 million) were intended for entrepreneurs from tourism and those generating at least 10% of income from export and indirect export. At the beginning of 2021, the Programme was amended in a way that direct approval was provided for loan amount of more than HRK 1,5 million (€200 thousand) for entrepreneurs in tourism activities and those generating at least 10% of income from export and indirect export allowed. By the end of 2020, under the loan Program under COVID-19 Measures, CBRD approved almost HRK 1.3 billion (€172.6 million). Having in mind that according to the Program under COVID-19 Measures, all banks in Croatia granted a total of HRK 1.7 billion (€225.6 million) in loans to entrepreneurs, approved CBRD’s loans make 43% of all approved loans within the Program under COVID-19 Measures. |
01 December 2020 |
The Croatian Bank for Reconstruction and Development announced a new package of "COVID loans" in the total amount €142.5 million to help small and medium enterprises maintain liquidity. Eligible are micro, small and medium-sized entrepreneurs in accordance with the Small Business Promotion Act, including natural persons performing a registered activity (crafts businesses, sole traders, family farms). The borrowers should cumulatively meet the following conditions: they are COVID-19 score clients, i.e. clients who have been, on the basis of the Methodology for the Calculation of COVID Score of the Financial Agency (FINA), assessed as clients whose business is endangered and who need additional finance. Assessment is assigned in accordance with the type of business entity, and all COVID scores are acceptable for lending purposes except the negative one. Furthermore, eligible are entrepreneurs that were not in difficulties on 31 December 2019 in terms of the General Block Exemption Regulation (Commission Regulation (EU) No. 651/2014 of 17 June 2014) and were classified to the risk category A (Stage 1 or Stage 2 of credit risk) on 31 December 2019 in accordance with commercial bank’s data and/or were classified by the Financial Agency (FINA). Borrowers should meet HBOR’s eligibility criteria and the conditions for the approval of individual ESIF guarantee of HAMAG-BICRO. The purpose of loans is financing of salaries, overheads and other basic operating expenses (the so-called ‘idle mode’), purchase of raw materials, settlement of obligations towards suppliers and other current operating expenses. Loan funds cannot be used for the settling of existing loan obligations towards commercial banks or other financial institutions or for the payment of VAT. Minimum loan amount is €187,500, while maximum loan amount is €2 million. Interest rate is maximally 2% per annum. |
20 October 2020 |
A meeting of the leaders of the Croatian Chamber of Commerce and Hamag Bicro was held at the Croatian Chamber of Commerce, and the main topic of discussion was the improvement of inter-institutional cooperation with an emphasis on speeding up and simplifying procedures for granting liquidity loans. The Croatian Chamber of Commerce is satisfied with the government's latest measures designed to help the business sector deal with the impact of the coronavirus crisis more easily and it believes they will bring them peace at least until the end of the 2020. The representative of the Croatian Chamber of Commerce underlined that there is a need to define a model for financial support which considers the specificity of every sector as much as possible, but priorities remain the same - maintaining liquidity of companies and keeping jobs. In this process crucial is the active role of Hamag Bicro and the Croatian Bank for Reconstruction and Development, primarily in providing loans for maintaining liquidity. |
In October 2020, the Croatian Bank for Reconstruction and Development stated in the “Financial Report for a first half of 2020” (page 24) that there were 792 demands for moratorium for the loans which were due in the period 1 April until 30 June 2020.
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers |
Other businesses
Importing/Exporting companies |
Does not apply to citizens |
Actors | Funding |
---|---|
National government
|
European Funds
Local funds National funds Regional funds |
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | No involvement | No involvement |
Form | Not applicable | Not applicable |
Social partners' role in the implementation, monitoring and assessment phase:
Due to the nature of measure social partners were not involved.
No involvement.
Citation
Eurofound (2020), Measures of Croatian Bank for Reconstruction and Development (HBOR) and Croatian Agency for SMEs, Innovation and Investment (HAMAG-BICRO), measure HR-2020-12/319 (measures in Croatia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HR-2020-12_319.html
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