POST BANK AND HEBROSBANK LAUNCH CREDITS WITH USD GUARANTIES
The US Agency for International Development (USAID) offered a guaranty of USD20MN on agricultural credits. This amount is evenly divided between HEBROSBANK and Post Bank. The agreement enforcing the loans guaranty mechanism was signed on September 24, 2003, in U.S. Ambassador James Pardew presence. The guaranty mechanism covers investment and turnover credits for the agricultural branch. They are available to both farmers and processing enterprises (canning factories, oil-factories, plants for meat and milk processing), as well as manufacturers of agricultural technics. The upper limit on the credit size, which will be covered by the guaranty, is USD750,000. Loans will be launched in Bulgarian Levs or in EURO, while the credit conditions will be determined by the banks themselves. The American Agency secures 50% of the potential losses on the credit principle. That means that if the bank cannot collect the money due after implementing all measures for compulsory execution, it could turn to the USAID, which will cover half the amount lost. The guaranty term is 7 years (until September 24, 2010). This condition set the final maturity of the credits launched, which, according to one of the banks, should be not later than one month before the guaranty maturity. Thanks to the agreement the two banks will be allowed to increase agricultural loans without levying tough pledge conditions. This will contribute to unemployment decrease and to better development of the underdeveloped rural regions, stated the USAID director Debora McFarland and the CEOs of Post Bank and HEBROSBANK, Panagiotis Varelas and Gautam Vir.