Transcript rciukrainepowerpoints1_files/Day 1

Regional Competitiveness Initiative: 4th Annual
Regional Conference on Competitiveness and
Economic Growth
Access to Finance
Serbia
Economic Conditions
-Foreign Trade in January and February alone plummets 35%
-Industrial Production down more than 20% with some sectors
declining more than 40%
-Unemployment, already high at 14-16%, expected to climb to
more than 20%
-GDP expected to fall 5-6% in 2009
-Currency losing ground though more recently signs of stability
A Few Impediments to Access
-No non-bank financial regulation in place
-Substantial deposit outflows in 4th quarter 2008 and 1st quarter
2009
-Almost 60,000 companies presently have their accounts
frozen.
-Banks account for as much as 95% of financial intermediation
in Serbia
-High percentage of loans in Serbia indexed to FX leading to FX
induced credit risk as currency fell.
And a few more…..
-Loan growth stalled and loan quality deteriorating
-Banks still using the “cherry picking” strategy
-Serbia well banked but risk management options remain
rudimentary
-
Government programs for improving access helpful but still
mired in bureaucracy
Government Efforts to Stimulate Credit
Completed/Underway
 Increase of guaranties for savings
 Arrangement with the IMF
 Decrease of Current Public Expenditure/Wages
 Loosening Monetary Policy
 Targeted Fiscal Expansion
Some Other Options
 Further easing of monetary policy
 Repayment of Government debt to suppliers to increase
liquidity
 Increase of Public Infrastructural Investments
Government Stimulus Efforts
Summary of the Financial Stimulus Package in Numbers
(Billions of Dinars) (exchange rate 94 dinars/Euro June 11, 2009)
Loans with government support:
•
•
•
•
Subsidized liquidity loans
Investment loans with the participation of the fund
Subsidized consumer loans
Foreign credit lines
40.0
17.0
20.0
45.0
Support to the economy through Development Fund & Agencies:
•
•
•
•
•
•
•
•
•
Start up loans
Development of companies in underdeveloped regions
Promoting tourism
Regular operations of Development Fund
Exports through AOFI (Export Ins. & Financing Agency)
Finance for factoring (through AOFI and SMEK)
Insurance & guarantees (AOFI, SMEK, GF)
Incentives to attract FDI
National Employment Agency Programs
TOTAL
3.10
2.49
0.32
6.20
4.32
1.73
4.31
1.70
3.00
149.17
Project Initiatives Supporting Access
 Inventoried Grant Programs, Debt Capital Products, Government
Programs and Private Equity firms in the country
 Source/referrals of potential companies for PE firms with specific
sector interest
 Work with a few banks in targeted sectors where they have interests
to expand their risk exposure (i.e. energy efficiency)
 Limited firm level support to identify sources of working capital