March 19, 2020 / 2:28 PM / 14 days ago

Bosnian banks to grant repayment freeze of at least three months

SARAJEVO, March 19 (Reuters) - Banks in Bosnia’s autonomous Bosniak-Croat Federation have agreed to grant a delay of at least three months on loan repayments for businesses and individuals hit by the coronavirus health crisis.

The region’s prime minister Fadil Novalic said on Thursday that the sector, which is nearly 90% foreign-owned, is liquid and sound. The region’s banking regulator and bank delegates would work out the necessary procedures, he added.

The regional government has also agreed to establish a special fund to stabilise the economy and support export-oriented companies and a guarantee fund that would assist those companies whose liquidity has been hit by the crisis.

It will also introduce credit lines, especially for small- and medium-sized companies, the government said in a statement.

The Federation government is working on amending legislation to enable tax authorities to defer the income tax payment for small businesses until June 30, a measure which has been also announced by the Serb Republic, Bosnia’s other autonomous half.

Bosnian employers have warned that tens of thousands of workers could lose their jobs, especially in manufacturing, transport and tourism, which have been hardest hit by the coronavirus outbreak, unless the two regional governments took measures to ease its economic impact.

The Serb Republic’s government has also introduced measures, with its Investment Development Bank (IRB) granting a three-month delay in loan repayments for businesses.

Bosnia on Tuesday declared a nationwide state of emergency, after its regions separately declared emergency situations and introduced measures to limit transmission of the coronavirus.

The Balkan country has reported 45 cases of coronavirus as of Thursday, with no deaths so far.

The International Monetary Fund said on Tuesday it may lend 165 million euro ($178 million) to Bosnia to soften the blow to its healthcare system and economy. ($1 = 0.9258 euros) (Reporting by Maja Zuvela and Daria Sito-Sucic; Editing by Alexander Smith)

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