MALI: Guarantee Scheme with DFC in Early 2021

The guarantee scheme agreed with the DFC could start in early 2021, said Serbian Finance Minister Sinisa Mali after a meeting with John Jovanovic, the director of the recently opened office of the U.S. International Development Finance Corporation (DFC).

– Today's talk laid down the foundations for the new credit guarantee scheme that we are agreeing with the DFC. I am convinced that we will negotiate favorable conditions for our companies, and the DFC will be a guarantee for loans taken out at banks in Serbia to the greatest extent. In the current guarantee scheme, if there are problems with the repayment, the guarantee is provided by the state of Serbia – Mali said.

According to him, the very fact that the DFC is considering the option proves that the American administration has trust in Serbia's economic policy and taking that kind of economic risk is therefore not a big problem for American investors.

The minister reminded that the first agreed guarantee scheme ended in late 2020 and that the new one, with the DFC, would start in early 2021, so that companies would have a little more time for business planning and application.

– Considering the general economic uncertainty in the world, it is very important to provide companies with stable, but primarily as cheap as possible, sources of finance in the market. Also, it is important to us for companies to have a choice, that is, to choose themselves what's best for them in the market. That is why it's important to have a variety of sources of finance. This competitiveness could also secure considerably lower interest rates, which is a goal for all of us. That is why we will also work intensively on developing other financial instruments that can finance the growth of companies which operate in Serbia – Mali said and expressed his expectation that a time in which companies would develop their development with their own funds was not too far off.

According to him, it's not realistic at the moment, because there is no sufficient accumulation of domestic capital, but the state will do everything to create that capital, as it is the only guarantee of the creation of new jobs and economic growth. Mali said that, on the other hand, the state, with its public investments, would create the digital and road infrastructure, with the goal of making that job easier for companies, the ministry announced on its website.

Ministarstvo finansija Republike Srbije

Ministry of Finance of Serbia

DFC

US International Development Finance Corporation

Siniša Mali

John Jovanović

guarantee scheme

credits

alternative sources of finance