EUR 472m in due credit deferred, EUR 387m in crisis loans secured

Ljubljana – Banks in Slovenia approved around EUR 472 million worth of loan payment deferrals in what have been roughly seven months of the coronacrisis. By 16 October they have moreover issued EUR 387.3 million worth of liquidity loans needed because of the crisis. Companies have meanwhile made very limited use of the state guarantees available for loans.

The deferrals became mandated by law as part of a stimulus package that entered into force at the end of March, meaning soon after the Covid-19 epidemic was declared. A one-year deferral is possible, with the measure expecting to stay in place at least until autumn next year.

Data from Banka Slovenije show that banks received deferral requests from 24,622 credit holders by 16 October and have approved 85%. About three quarters were filed in the first month after the law entered into force.

Individuals accounted for 17,981 of the requests worth EUR 38.8 million in total, while SMEs stand out in terms of the value of the loans deferred, accounting for EUR 377 million with 2,823 requests.

According to the central bank, companies moreover issued 1,069 requests for liquidity loans related to the crisis worth EUR 387.3 million by mid-October.

Businesses are also meant to be backed with a measure that was adopted at the April and enables liquidity loans with state guarantees, but this scheme remains little utilised, with 23 such loans worth a total of EUR 30.9 million approved by mid October. The state earmarked EUR 2 billion for the measure.

Banka Slovenije believes that interest in loans backed by the state will increase in case the economic situation deteriorates in the coming months. The central bank said that the recovery that began as the first wave of the epidemic calmed down in May is starting to lose momentum.

While the guaranteed loans scheme is being extended until the end of June next year, the Slovenian Bank Association (ZBS) and the Chamber of Commerce and Industry (GZS) have sent a set of proposals to the Finance Ministry that are meant to simplify it and make it more appealing.

Banks have argued that the scheme, which involves the state providing a guarantee for 70-80% of the principal, has been slow to catch on because of other support measures available and because of its complexity.

The proposals include a raising of the ceiling for the value of the loan from 10% of sales revenue and 100% of labour costs in 2019 to 25% and 200% respectively, meaning to the maximum ceiling allowed by the European Commission.