Finance Minister Slavko Linic recalled that the previous government, as part of measures to encourage economic recovery, had introduced the lending models A and A+ to ensure cheaper loans for business owners.

Under the two models, a total of 1,081 bank loans have been granted, amounting to some five billion kuna. One-third of the amount was ensured by the Croatian Bank for Reconstruction and Development (HBOR) and two-thirds by commercial banks, with the average interest rate being 4.9 percent.

The current economic crisis has caused problems in the repayment of those loans, so the government has decided to introduce additional measures to ensure an extension of the repayment deadline from three to five years and of the grace period from one to two years.

Linic said that soon a new programme for economic development would be adopted to provide loans to business owners with a lower interest rate, of about three percent.

The programme has been agreed with the Croatian National Bank, the HBOR and the commercial banks and it amounts to eight billion kuna, to be provided by the HBOR and commercial banks. The repayment deadline under that programme would be three years.

Linic said the government was thus sending a clear message to entrepreneurs, enabling them to access cheaper loans to finance their production and investments.

Also today, the government decided, in line with the Act on the Establishment of the Investment and Competitiveness Agency, to appoint Zdenko Lucic of the Economy Ministry as the Agency's temporary director. Lucic is expected to carry out tasks related to the registration of the Agency in the court register and preparations for the start of its work.

He was appointed for a period of no more than six months, until the appointment of Agency director.