Serbian companies owe EUR 9.3 billion to foreign countries

Domestic companies have been borrowing money abroad for years because of more favorable terms of lending. Loans were much cheaper than in Serbia. According to the data of the National Bank of Serbia from late 2013, 2,012 local private companies took out loans from foreign creditors totaling EUR 9.3 billion. Despite a big percentage of non-performing loans in the country, there is no information on whether our companies are late with the repayment of the loans taken out abroad and whether they repay them at all.

Officially, our companies are not capable of paying off about RSD 400 billion in loans, which is somewhat over 20% of all the loans received. Bankers claim that the percentage of bad loans is twice as big. In order to get their money back, banks may choose to activate the mortgage when all other debt rescheduling measures are exhausted. But what happens if a company from our country is not able to pay off a loan abroad?

According to the National Bank of Serbia, a private company can borrow money abroad based on a loan agreement signed with a foreign creditor in line with the Law on Foreign Currency Operations.

- Pursuant to this regulation, a private company can import goods or services from abroad on credit (commercial loan) as well as receive foreign currencies on its FX account in a local bank on the basis of a loan (financial loan) - said people at the central bank of Serbia. The loan that is not used to pay for imported goods and services can be repaid a year after it is used. Exceptions are financial loans for agricultural and export activities that can be repaid after three months.

Guarantees and payments

- In case a loan is not being paid off or is being repaid but in an untimely manner, there are consequences under the loan agreement - people at the NBS explain.

- For example, the mortgage may be activated, the agreement terminated, default interests charged, a dispute may be brought before the competent court...