Jan. 24 (Bloomberg) -- Serbia has set aside more than $7 million in subsidies to encourage banks to lend to small- and medium-sized firms facing liquidity problems, the Finance Ministry said.
The government has set aside 600 million dinars ($7.2 million) in the 2013 budget for loan subsidies and capped interest rates at 3.5 percent for euro-linked loans, while dinar-denominated lending costs can’t exceed the central bank’s benchmark interest rate, currently 11.5 percent, the Belgrade-based ministry said in an e-mailed statement.
Banks are expected to lend “around 100 million euros in 2013,” the ministry said, adding that the government will subsidize “5 percent of the interest rate on those loans,” which the borrowers will be able to repay over 18 months, including a five-month grace period.
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