Agreement Between HBOR and 15 Banks on Interest Rate Subsidies for Entrepreneurs

The Croatian Bank for Reconstruction and Development (HBOR) and 15 commercial banks have signed an agreement on cooperation in subsidizing interest rates from NPOO funds, whereby a financial instrument worth nearly 80 million euros will subsidize interest rates on investment loans for entrepreneurs and public sector entities by up to 75 percent.

HBOR has been entrusted with the implementation of the financial instrument within the National Recovery and Resilience Plan (NPOO), and the commercial banks involved in the implementation of the instrument are Agram Bank, Banka Kovanica, Croatia Bank, Erste & Steiermärkische Bank, Hrvatska poštanska banka, Istarska kreditna banka, Karlovačka banka, Kentbanka, Nova hrvatska banka, OTP Bank, Podravska banka, Privredna banka Zagreb, Raiffeisenbank Austria, Slatinska banka, and Zagrebačka banka.

The President of HBOR, Hrvoje Čuvalo, emphasized that with the help of this approximately 80 million euros, it is possible to stimulate investments of up to 400 million euros. When it comes to interest rates, they will be reduced by 50 to 75 percent from the initial market interest rate.

He stated that this product was designed by HBOR at the government’s initiative, the program was accepted by the European Commission, and it will stimulate investments with the help of European funds, primarily benefiting small, medium, and large entrepreneurs, and thus the entire economy.

Moreover, the projects to be financed must also meet the criteria of environmental sustainability, Čuvalo noted, urging entrepreneurs to contact HBOR or banks as soon as possible to start realizing investments.

Subsidies can be granted through loans for investments in fixed assets, from starting a business to modernizing and expanding capacities. The amount of the subsidy per individual loan is limited to 500 thousand euros for small and medium-sized enterprises, and to one million euros for other entities.

A subsidy of up to three percentage points is granted depending on the purpose and type of investment, and it can amount to up to 75 percent of the interest rate for green or digital transition, up to 65 percent of the interest rate for investments in special areas of Croatia or in research, development, and innovation, as well as for public sector investments in mitigating the effects of earthquakes, or up to 50 percent of the interest rate for other investments in competitiveness and resilience.

A member of the Management Board of PBZ, Vedrana Jelušić Kašić, stated that each bank will be able to independently define the interest rate, depending on the risk assessment of the project and the client, whereby the client receives the aforementioned subsidy of up to 75 percent.

The President of Raiffeisen Bank (RBA), Liana Keserić, presented an estimate that interest rates on such loans should be around five percent, and when the subsidy is taken into account, the interest rate should be around two percent.

Čuvalo also reported that HBOR had nearly 30 percent higher lending activity in 2022, amounting to around 830 million euros. The bank’s profit last year was around 185 million kuna.