Insurance of Exporters’ Liquidity Loan Portfolio
If you are a direct or an indirect exporter or plan to export, and you need a loan for the financing of your liquidity, you can ask your bank for approval of such a loan, with repayment coverage of up to 80% of loan principal under the Programme for Insurance of Exporters’ Liquidity Loan Portfolio (hereinafter: Insurance Programme). The Insurance Programme is implemented by HBOR as insurer for and on behalf of the Republic of Croatia, with the aim of promoting exports and internationalisation of the Croatian economy.
TO WHOM IS THE INSURANCE PROGRAMME INTENDED?
The Insurance Programme is intended to entities performing economic activity (apart from activities stated on the list of Ineligible activities within HBOR’s General Eligibility Criteria), regardless of their size and legal form, that are registered with the headquarters in the Republic of Croatia (companies, crafts businesses, and other legal entities and natural persons - sole traders) and, among others, meet also the following conditions:
TO WHOM IS THE INSURANCE PROGRAMME INTENDED?
The Insurance Programme is intended to entities performing economic activity (apart from activities stated on the list of Ineligible activities within HBOR’s General Eligibility Criteria), regardless of their size and legal form, that are registered with the headquarters in the Republic of Croatia (companies, crafts businesses, and other legal entities and natural persons - sole traders) and, among others, meet also the following conditions:
- are not subject to sanctions of the EU or international partners,
- are not in difficulties,
- meet duly their loan obligations and obligations towards the state,
- meet the export criterion:
- in the last financial year for which official annual financial statements are available, have generated:
- at least 30% of their operating income from export revenues (exporter), or
- more than 50% of operating income from overnights, where in that year the share of realised overnight stays of non-residents of the Republic of Croatia in the total number of overnight stays is at least 30% (exporter), or
- at least 30% of income in cooperation with one or more exporters from the previous two indents (exporter’s supplier),
or
- at the moment of loan disbursement have unrealised or unpaid contracts/offers in the loan amount as follows:
- export contracts with one or more foreign buyers (exporter), or
- contracts/offers with one or more exporters from the previous indent concluded for the purpose of realisation of such export contract/offer (exporter’s supplier),
- creditworthiness of the company has been assessed favourably by the bank,
- they are eligible for the establishment of a business relationship in terms of reputational risk.
HOW IS THE INSURANCE PROGRAMME IMPLEMENTED?
The Insurance Programme is implemented through banks that conclude a Portfolio Insurance Agreement with HBOR as insurer. The Agreement includes, among other things, the Insurance Programme and the General Terms and Conditions that contain the rights and obligations of the bank as the insured and HBOR as the insurer. It is available to all credit institutions established in the Republic of Croatia (headquarters or branch office) that operate in accordance with the Credit Institutions Act (operating license in the Republic of Croatia), and HBOR as a creditor, and which meet the criteria prescribed by HBOR as the insurer.
For credit insurance, banks do not submit individual applications for insurance, but include loans in the insured portfolio independently and report on the loans so approved to HBOR as the insurer on quarterly basis. Exceptionally, banks are obliged to ask HBOR as the insurer for prior consent to include loans in the loan portfolio:
- for which the net insured sum will be EUR 5,000,000.00 or more, and/or
- which have been granted to borrowers to which the insurer is already exposed or, together with the respective loan, will potentially be exposed under insurance programmes for liquidity / working capital / pre-export loans in a total gross amount of EUR 20,000,000.00 or more, or
- which are granted to borrowers that do not duly meet their current loan obligations and obligations towards the state.
Loan approval is performed independently by the bank, whereby the loan that the bank wants to include in the portfolio must meet the eligibility criteria for including the loan in the portfolio defined by this Insurance Programme. The insurance programme can be used for new liquidity loans only, and not for already existing ones.
As financial intermediaries, banks are obliged to provide exporters with more favourable loan terms and conditions, for example in the form of a higher volume of financing (by approving greater exposure to the exporter), by taking over riskier portfolios (by approving loans despite the exporter's riskier rating), lower requirements for other collaterals, lower interest rates etc.
WHAT IS THE PRICE OF INSURANCE?
As financial intermediaries, banks are obliged to provide exporters with more favourable loan terms and conditions, for example in the form of a higher volume of financing (by approving greater exposure to the exporter), by taking over riskier portfolios (by approving loans despite the exporter's riskier rating), lower requirements for other collaterals, lower interest rates etc.
WHAT IS THE PRICE OF INSURANCE?
- Premium: For each loan insured under the Insurance Programme, HBOR as the insurer charges the insurance premium to the bank as the insured.
- Fee: The fee for administrative costs of including the loan in the portfolio, for which no consent of the insurer is required, is not calculated or charged. Fee for the processing of request for the consent of the insurer is calculated and charged upon the processed request for consent.
WHAT ARE THE ADVANTAGES OF THE INSURANCE PROGRAMME?
- insurance of up to 80% coverage of the principal amount of the loan for the exporter's liquidity in case of non-fulfilment of the obligation under the loan contract,
- it is possible to insure loans granted to entrepreneurs of all sizes and from all sectors of the economy,
- quick implementation of insurance (portfolio principle),
- enables release or reduction of existing debt limits (other collaterals),
- high-quality and affordable collateral,
- potential indemnity payment in a short period of time.
DOCUMENTATION:
Draft Agreement on Insurance of Exporters’ Liquidity Loan Portfolio OU-OPK-LIKV
Schedule 1 - General Terms and Conditions of Insurance of Exporters’ Liquidity Loan Portfolio OU-OPK-LIKV
Schedule 2 - Programme for the Insurance of Exporters’ Liquidity Loan Portfolio PO-OPK-LIKV
Schedule 3 - Draft Recovery Contract OPK-LIKV
Schedule 4 - Notification on Inclusion OPK-LIKV
Schedule 5 - Notification on Change of the Loan Repayment Period OPK-LIKV
Schedule 6 - Notification on Repaid Loans OPK-LIKV
Schedule 7 - Report on Loan Balance OPK-LIKV
Schedule 8 - Report on Recovery OPK-LIKV
Schedule 9 - Mandatory Content of the Loan Contract OPK-LIKV, with enclosures (statement of the Insured, statements of the Exporter)
Schedule 10 - Form - Claim OPK-LIKV
Schedule 11 - Form - Application for Insurer’s consent OPK-LIKV
Statement of the Insured about Meeting the Criteria from the Programme OPK-LIKV
BANKS PARTICIPATING IN THE IMPLEMENTATION OF THE PROGRAMME
Banka Kovanica d.d.
Varaždin
Hrvatska banka za obnovu i razvitak
Zagreb
Hrvatska poštanska banka d.d.
Zagreb
Kentbank d.d.
Zagreb