Bratislava, April 17, 2020 – The Slovak Investment Holding (SIH) and Slovenská sporiteľňa (SLSP) agreed on providing financial assistance to small and medium-sized enterprises (SMEs) designed to help them overcome the current period of adopting measures aimed at curbing the spread of coronavirus.
“In record time, we have managed to launch a financial instrument to support our economy, as barely four weeks have passed between announcing the scheme and signing a contract with the first bank. We are thrilled about signing the contract today with one of the country’s largest banks. In the coming days, Slovenská sporiteľňa should be followed by other banks and we hope that the required assistance will reach as many affected businessmen and businesswomen as soon as possible,” commented Peter Dittrich, SIH Executive Board Vice-Chairman and Investments Director, upon singing the contract.
“Small and mediu-sized businesses are the cornerstone of Slovakia’s economy. We realize that they need help fast in this time of crisis and Slovenská sporiteľňa in cooperation with the SIH knows how to help entrepreneurs overcome the hard times. I believe the programme of guarantees and interest subsidies we signed today as the first bank in Slovakia can provide tangible help to companies,” seconded Norbert Hovančák, SLSP Executive Board member responsible for corporate banking.
Overall, nine banks have responded to the call released on March 30. For the time being, the volume of funds allocated to the guarantee programme is €38 million and shall be divided between interested banks proportionally according to the volume of loans extended to small and medium-sized businesses, which individual banks registered as of the end of 2019. Based on an agreement with the Ministry of Economy, the total volume of guarantees is expected to increase by approximately €57 million within several days. If SMEs manifest increased interest in loans covered by the SIH Anti-Corona Guarantee, inflating the total volume further is negotiable. At the same time, the SIH participates in negotiations between the Slovak Government and banks, which should lead to additional guarantee instruments designed to support Slovak businesses negatively affected by the current coronacrisis.
SIH Anti-Corona Guarantee
The Slovak Investment Holding released a call for financial institutions to take part in the implementation of the ‘SIH Anti-Corona Guarantee’ financial instrument on March 30, 2020. The purpose of the instrument is to enable banks to extend favourable-terms bridging loans to SMEs, topped up by an interest rate subsidy for those enterprises which manage to keep their staffing levels unchanged. The main objective is to help SMEs overcome financial difficulties caused by the ongoing situation and preserve existing jobs despite the crisis.
The financial instrument consists of a portfolio guarantee (not to exceed 80% of the volume of individual loans; not to exceed 50% of the total portfolio volume) for financial institutions and an interest subsidy of up to 4% for those SMEs that manage to preserve currently available jobs. Under these parameters, each euro of portfolio guarantee is expected to create 2.5 euro worth of favourable-terms loans. By means of said financial instrument, the SIH will shoulder part of the banks’ credit risk ensuing from new loans extended to the SMEs negatively affected by the current situation. Thanks to the SIH Anti-Corona Guarantee, the newly-provided loans for SMEs may be provided as interest-free.
The SIH Anti-Corona Guarantee is expected to facilitate the provision of new bridging loans with maturity of no more than four years (including a 12-month grace period on both principal and interest) and up to the amount of €1.2 million per loan. The beneficiary businesses will be able to use the funds loaned to cover both their investment and operating costs in order to preserve employment. The programme is funded using the European structural and investment funds, namely Operational Programme Integrated Infrastructure and the government budget of the Slovak Republic.