The government agreed to support proposals submitted by the Ministry of Economic Affairs and Communications and KredEx to reduce the conditions for crisis measures so support funding can reach companies faster and in a larger volume.
The govement decided the credit loss compensation limit of KredEx's extraordinary loan guarantee will increase to 30 percent for new loans issued by banks. When adding a KredEx guarantee to existing loans, the current upper limit of loss indemnity will be maintained at 15 percent.
Minister of Foreign Trade and Information Technology Raul Siem (EKRE) said the aim of the crisis measures is to provide loans and guarantees to companies quickly and on favorable terms, so entrepreneurs can survive the economic crisis resulting from the emergency situation as painlessly as possible.
"Unfortunately, the current ceiling for loan guarantees has made KredEx's guarantees uncertain for banks. Relaxing the limit on new loans issued by banks will help businesses to a much greater extent than before, and hopefully also on more favourable terms," he said.
At the Cabinet meeting held on April 24, the government set the limit for compensating credit losses for KredEx's crisis measures at 15 percent of the amount of loan guarantees used by the bank.
Last month, the Governor of the Bank of Estonia has said the terms of Kredex's loan guarantees are holding back their issuance. Prime Minister Jüri Ratas (Center) said the terms would be reviewed.
Editor: Helen Wright