Women in Business Support Programme

 

   1. Programme Objective

 

Objective of this Programme is to support establishing and growth of micro, small and medium companies and entrepreneurs wherein women carry out business activity. This is intended for supporting female entrepreneurship and promoting affirmation of women in business.

2.      Loan Purpose

 

Loans are intended for investments in fixed assets - tangible assets (land, buildings, equipment and appliances, livestock, long-term living plants, inventory...), intangible assets (product or service development, patents, licenses, concessions, copyrights, franchises...) and working capital. 

IDF may directly finance up to 75,00 % of the total investment value. 

Loan amount dedicated to investing in working capital may be up to 30,00 % of the total loan amount. 

For the project to be credited under this credit line, the woman must be the holder of the business, i.e. the 100% or majority owner and Executive Officer must be a woman. 

Financial support shall not be approved for the following purposes:

·         Parts of investments intended for meeting personal needs;

·         Catering facilities exclusively serving drinks;

·         Newspaper and other occasional edition publishing activities, activity of producing and airing radio and television programs, activities of newspaper agencies and services of marketing and public relations agencies;

·         Acquisition of shares in other companies, stocks and other securities;

·         Gas and petrol stations;

·         Construction of residential and business units for sale;

·         Production and sale of military equipment or services;

·         Motor vehicle sale points;

·         Completed investments intended for loan obligations refinancing;

·         Banking and insurance;

·         Foreign exchange and/or securities trading;

·         Participation in projects violating internationally recognized employee rights, including safety at work, rules and procedures in Montenegro;

·         Any of the activities perceived as illicit or environmental and/or human health threat: gambling, tobacco, alcoholic beverages (except wine and fruit brandies);

·         Immoral and illegal activities.

3.      Loan Beneficiaries

Loan beneficiaries may be women entrepreneurs and business entities wherein women carry out business activity (founder and Executive Officer must be a woman). 

End beneficiaries of these loan arrangements may be entities that have obtained a confirmation from the Tax Administration on their tax arrears. 

If the applicant is a legal entity (economic society), the legal entity itself and founders of legal entities may not hold more than 20,00% of the share in another legal entity, while in the case of entrepreneurs, the same must not hold share in another business entity of more than 20,00%.

Loan beneficiaries may not be legal entities with the share of legal entities in the ownership structure of more than 20,00%.

Loan beneficiaries may only be legal entities that have operated for more than 12 months. 

Right to a loan is not a guaranteed right and IDF MN JSC shall enact a decision on each Loan Application.

4.      Lending Method 

IDF MN JSC implements this Programme through: 

·         Direct lending to the loan beneficiaries;

·         Financing end beneficiaries of loans through commercial banks that have established business relation with IDF MN JSC.  

Loan Applications that are not supported with mandatory defined documents shall not be taken into consideration. 

Based on the Loan Agreement between a commercial bank and IDF MN JSC, the commercial bank shall enter into agreement with the end beneficiary of the loan.

5.      Loan Conditions 

Loans approved under this credit line shall be provided from the Company’s own credit potential. 

A) Direct lending 

·         Maximum amount up to € 1.000.000,00 (for entrepreneurs up to € 50.000,00);

·         Minimum amount of € 10.000,00;

·         Interest rate of 3,30 % annually with the proportional interest calculation method;

·         Maximum term of 12 years (including grace period);

·         Grace period up to 4 years. 

Special lending conditions: 

·         For subjects implementing projects in northern municipalities of Montenegro and in municipalities below the average value of the development index in Montenegro, the interest rate amounts to 2,80 % on an annual level with proportional interest calculation method. 

INCENTIVE MEASURES FOR DIRECT LOAN ARRANGEMENTS: For projects for which a bank guarantee is provided as collateral, the interest rate will be 2,00% on an annual level. 

In case of a direct loan arrangement that is fully or partially supported by a bank guarantee, cash collateral or State guarantee, such loan arrangement or its proportional part shall not be considered as exposure of the end beneficiary. 

B) Lending through commercial banks

                    Maximum amount up to €1.000.000,00;

                    Minimum amount of € 10.000,00;

                    Interest rate of 4 % annually (out of which 2,50% belongs to the bank).

The bank has a right to arrange a lower interest rate with the client, in which case the interest rate of Fund amounts at least 1,5%;

                    Maximum term of 12 years (including grace period);

                    Grace period up to 4 years. 

NOTE: Business bank shall, based on its own business policy, have the right of approving a loan to the client in a percentage it deems appropriate, from its own potential and under the terms it establishes at its own discretion.

Commercial bank through which the loan arrangement is realized shall be required to provide from the end loan beneficiary fulfilment of all obligations under the legislation regarding the realization of the investment - a project supported with the loan proceeds of the IDF MN JSC.

6.      Fees 

Direct loan arrangements shall be subject to the following fee:

  • 0,30% on the amount approved for entities that implement projects in the northern municipalities and in municipalities that are below the average value of the development index in Montenegro;
  • 0,50% on the amount approved for projects implemented in other municipalities. 

Fees for loans realized through commercial bank IDF MN JSC shall not be charged, and the fee shall be agreed upon between the bank and the end beneficiary.

7.      Utilization of Loan 

Loan utilization period is up to 24 months.

Final utilization period shall be established on the case-by-case basis for each individual loan arrangement dependent on the real needs and the dynamics of investing.

Loan beneficiaries shall be obliged to a dedicated usage of loan funds in accordance with this programme and agreement signed between IDF MN JSC and loan beneficiary.

IDF MN JSC shall perform control of the dedicated usage of loan funds.

IDF MN JSC shall execute approved direct loans whose purpose is investing in fixed assets (and inventory), by transferring funds to:

  • The supplier’s account or service/works provider or
  • Loan beneficiary account, in single or in tranches - in phases. 

Transfer of funds directly to the Loan Beneficiary’s account in tranches – in phases, means that, as a general rule, the subsequent transfer of funds will not take place until the Beneficiary justifies dedicated usage of prior realized funds under the approved loan (fund per already transferred tranches).

Exceptionally, in case of refunds of the paid investments, the transfer of funds to the loan beneficiary's account may be performed as a single payment, in accordance with the present rulebook of IDF MN JSC.

The transfer of funds under loan arrangements through and with the guarantee of commercial banks shall, as a general rule be a one-time exercise.

In case of extending loans to final beneficiaries through commercial banks, commercial banks are obliged to establish and maintain documents and keep records that provide for a prompt and efficient control of dedicated usage of loans, as well as for defining other conditions for utilization of loan finds in accordance with legal requirements. IDF MN JSC retains the possibility of exercising control over dedicated usage of loan funds in direct contact with the end beneficiary.

8.      Means of Security 

As means of security, IDF MN JSC shall accept bills of exchange, mortgage over immovable property (the estimated value of the immovable property must be at least equal to the amount of the request loan), bank guarantees, local self-governments’ guarantees, guarantees of the Government of Montenegro, guarantees of credit rating legal entities, stocks of receivables, administrative bans on income, at least one solvent guarantor (depending on the amount of the loan and the guarantor's income),and other generally accepted instruments of security in the banking sector, in accordance with the Acts of IDF MNE JSC and decisions passed by competent bodies of IDF MN JSC. 

All costs with regard to providing instruments of security as well as of the execution of insurance-related tasks, deletion and retrieval of realized instruments shall be carried by the loan beneficiary. 

In case of loans through and guaranteed by commercial banks, bills of exchange and bank authorizations shall be accepted as collateral, whilst the bank retains the right to contractually arrange means of security with the end beneficiary.

9.      Required Documents 

Documents required for realization of the project through direct loan arrangement:

  • Loan Application;
  • Investment programme in accordance with the methodology of IDF MN JSC, or an investment programme of an acceptable content;

·         Excerpt from the Central Registry of Business Entities - not older than 30 days;

  • Certificate on VAT registration, if the end user is subject to the VAT;
  • Valid Statute of the Company;

·         Authorization for retrieving data from the Regulatory Loan Registry of the Central Bank (RKR), including founders and related parties[1];

  • Valid form of certified signatures of persons authorised for representation (OP) and valid specimen signature card;

·         Tax Administration certificate on settled taxes and contributions – not older than 30 days;

  • A set of annual financial statements (Balance Sheet, Income Statement, annual account balance (Trial balance), analytical breakdown of buyers and suppliers) – for the past two years, as well as the interim aforementioned reports for the current year, exception being the clients that are not subject to mandatory compilation of financial statements;
  • Audit report for loan beneficiaries that are subject to statutory audits under the law;

·         Official form for reporting on settlement of monthly taxes and social contributions for employees, verified by the Tax Directorate as evidence of the number of employees;

  • Proposal of the collateral;
  • Pro-forma invoices (photocopy or original) on procurement of equipment and inventory, preliminary invoices for construction works, preliminary agreements on purchase of real estate (IDF MN JSC shall not accept offers/preliminary agreements issued by natural persons, exception being purchase of real estate, offers/preliminary agreements issued by related parties or internal invoices). The documents in subject may not be dated more than three months from the date of the submission of the Loan Application. 

For construction/expansion/reconstruction of business facility

·         Real estate folio for the real estate where the concerned investments is realized not older than 30 days;

·         Building permit (equivalent in accordance with the Law);

·         Priced bill of quantities and offers for execution of works. 

For purchase of business premises

·         Real estate folio in which the real estate which is the subject of the sale is registered which is not older than 30 days;

·         Preliminary agreement/agreement on purchase of real estate (certified by a notary);

All documents, as a general rule, shall be submitted in Montenegrin language.

Executive office of the IDF MN JSC retains the right to request additional documents. 

Documents required for realization of the project through and with the guarantee of a commercial bank:

·         Investment programme in line with bank regulations;

·         Decision of the bank’s competent body;

·         Decision on registration of the end beneficiary in the Central registry of Business Entities or in another register of the competent authority;

·         Certificate on VAT registration, if the end user is subject to the VAT;

·         Tax Administration certificate on settled taxes and contributions – not older than 30 days;

·         Balance Sheet and Income Statement for the past two years;

·         Official form for reporting on settlement of monthly taxes and social contributions for employees, verified by the Tax Directorate as evidence of the number of employees;

·         Pro-forma invoices (photocopy or original) on procurement of equipment and inventory, preliminary invoices for construction works, preliminary agreements on purchase of real estate (IDF MN JSC shall not accept offers/preliminary agreements issued by natural persons, exception being purchase of real estate, offers/preliminary agreements issued by related parties[2] or internal invoices). The documents in subject may not be dated more than three months from the date of the submission of the Loan Application;

·         Statement on related parties.

All documents, as a general rule, shall be submitted in Montenegrin language. 

Executive office of the IDF MN JSC retains the right to request additional documents.

10.  Other Provisions 

Additional rules applicable to this Loan Programme, which are not mentioned in this document, are defined in special acts passed by competent bodies of IDF MN JSC.

11.  Credit Line Validity

 

This Credit Line shall be valid until 31 December 2019, or until it’s altered or terminated. 

President of the Board of Directors of IDF MN JSC

 

 PhD Zoran Vukčević




LENDING

Factoring