Signed Guarantee Agreement for Financing Projects for small and medium sized enterprises through Montenegrin commercial banks

The Ministry of finance of Montenegro, on behalf of the Government of Montenegro issues the state guarantee for the loan arrangement with the European Investment Bank (EIB), worth 91 million Euros. The aforementioned amount will be landed to Montenegrin commercial banks with the objective of supporting the projects of small and medium sized enterprises. In accordance with the EIB estimates, the Government of Montenegro approved the issuing of guarantees fro the loans to the following banks: Crnogorska komercijalna: 33.000.000 Euros, Hipo Alpe Adria: 5.000.000 Euros, NLB Montenegro: 20.000.000 Euros, Podgorička banka: 7.000.000 Euros, Opportunity Bank: 6.000.000 Euros, Atlasmont banka: 9.000.000 Euros, Hipotekarna banka: 4.000.000 Euros, Komercijalna banka Budva: 3.000.000 Euros, First Financial bank: 2.000.000 Euros. The repayment term, grace period and the interest rate interrelate, whereas project type will be considered in approving the loan. The grace period for approved funds is 4 years, and for infrastructure related projects 5 years, while the repayment term is 12 years, or 15 years for infrastructure related projects. With regard to interest rates, at the moment of disbursing first credit tranche, the banks may opt for the fixed or variable interest rate. The fixed interest rate is not linked to pure EURIBOR, but to swap rate, depending on the number of years of loan repayment on which is added the fixed spread of 60 basic points (0.60%).