Croatian National Bank (HNB) Governor Boris Vujcic has announced a meeting next month with the new government, commercial banks and European financial institutions in a bid to create a new guarantee scheme aimed at encouraging lending to small and medium enterprises.
“The topic of my bilateral meetings at the Euromoney Conference was to set up a guarantee scheme to boost small and medium enterprises whose main problem is the lack of capital and collateral, or rather a lack of funds to secure loans,” Vujcic underscored on Wednesday on the fringes of the Vienna conference. He added that funds from the European Investment Fund (EIF) and European Investment Bank (EIB) could be included in that.
“Those funds could serve as a guarantee for a very high portion of losses on loans to small and medium companies. That scheme could presently do more with regard to an increase in loans for small and medium-sized companies than any supplement in cash flow of which we have too much of in any case,” Vujcic claimed, adding that he had been given positive feedback from representatives of European financial institutions.
Speaking to reporters after a debate on monetary policies Vujcic said that there was still room for consolidation of the domestic banking sector.
During the debate Vujcic said that Croatia had to stop the growth in the share of budget deficit and public debt in Gross Domestic Product (GDP) and to try and satisfy Maastricht criteria in order to be seriously prepared to enter the eurozone.
Speaking about the effects of economic sanctions imposed on Russia, Vujcic said that that had led to a reduction in Croatia’s exports to Russia but that this was not significant because this setback was compensated with a growth in exports on other markets.
As far as stability of the exchange rate is concerned, Vujcic underscored that the HNB has to maintain the kuna’s stability due to the high euroisation. “Although the exchange rate has been kept stable, in the past two years there has been a noticeable growth in goods exports and not just services,” Vujcic added.
“The higher growth of Croatia’s GDP in 2015 than initially expected has resulted from the drop in the price of energy. This fall in prices is not bad for Croatia considering that we import most of our energy,” Vujcic said.
The Euromoney Conference in Vienna on Wednesday marked the end of the The Central & Eastern European Forum 2016 that attracted more than 1,000 participants – ministers, governors, investors, economists and analysts from the region to discuss the region’s economic 2016 agenda.