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For this instrument a grant component of 38% is given. This grant component is attained by combining a contractual interest rate of 0% for the buyer with a long repayment period (between 10 and 15 years). The length of the repayment period of the credit depends, amongst others, on the differentiated discount rate (DDR) set by the OECD, which varies from year to year.
With the interest bonification, Finexpo bears the full interest rate linked to the credit (contractual amount plus Credendo premium) granted to the client, who in fact will only pay back the capital.
Specifically, Finexpo bears the difference between the reference rate used by the agent bank and the 0% rate which the buyer benefits from for his credit. Finexpo takes on responsibility for the interest rate costs during the manufacturing and the repayment period upon presentation by the bank of appropriate documents on the basis of six-monthly instalments.
An additional grant can be added in order to make the reimbursement period shorter (e.g.: if one reduces the grant component percentage of the interest bonification from e.g. 38% to 20%, paying the difference in the form of a 18% grant, the repayment period will shorten considerably). As a consequence, the Credendo premium will also be lower.
Depending on the amount, the payment of the grant can be extended over several budgetary years without exceeding the execution period. The interest bonification and the grant account together for a 38% grant component. Finexpo calculates the length of the repayment period for each individual dossier.
Finexpo aid is available only for projects in euros.
Conditions for granting an interest rate subsidy
- Commercial non-viability of the project (no positive cash flow from the investment before 10 years have elapsed)
- Relevance for development
- Priority for the country receiving the aid
- Concurrent with aid
- Sufficient Belgian interest
- The project needs to be covered by Credendo
Finexpo aid is available only for projects in euros. Due to budget constraints, this interest rate subsidy instrument is in principle used only for contracts worth a maximum of €10 million.
Documents for an interest bonification
For projects for which an interest rate subsidy and additional grant is applied for, companies must compile a dossier on the basis of the standard questionnaire jointly drawn up by Finexpo and the Del Credere Office. The economic aspects of the project and its relevance for development can be examined on the basis of this questionnaire.
The Finexpo Committee will examine the dossier and deliver an opinion to the Minister for Foreign Trade. The minister will then decide whether or not to grant an interest rate subsidy.
The minister’s favourable decision takes the form of a promissory note, which is a document that is sent to the bank and/or the exporter and guarantees state intervention for a period of one year, twice renewable (i.e. three years altogether).
If the transaction is concluded within this three-year period, a Ministerial Decree is assigned to the exporter’s bank to formalise the granting of an interest subsidy.