State guaranteed loans extended until the end of 2021

From the onset of the health crisis, in April 2020, the government agreed to an agreement with the banking sector for a state guaranteed loan scheme. One way to ensure that the economic machine can continue to run. Eight local banks had signed the agreement: BCEE, BIL, BGL BNP Paribas, Banque de Luxembourg, Raiffeisen, ING, Bank of China and Banque BCP.

On June 30, the same actors met with the Minister of Finance, Pierre Gramegna (DP), to sign the extensions of extension until December 30, 2021. An extension which falls within the framework of the law of 1^is June 2021 which extends the period of application of the state guarantee scheme from June 30, 2021 to December 30, 2021. Through this system, the state guarantees loans up to 2.5 billion euros over a maximum period of 6 years. business banking. Since the start of the crisis, the State Treasury has recorded loans amounting to 186.6 million euros, of which the Luxembourg State guarantees 85%, namely 158.6 million euros.

Trade, the first applicant

Among the sectors that have used this system the most, it is the trade sector that has used it the most (60.8 million euros). The other sectors concerned are the manufacturing industry (24.4 million euros), construction (23.7 million euros) and the hospitality industry (more than 21 million euros).

The guaranteed loan system, initially planned until the end of December 2020, has been extended for the first time until June 30, 2021. It is now guaranteed for the entire year.

That said, the government observes that, until now, the Luxembourg state has not yet had to act as guarantor on an unpaid loan.

For Guy Hoffmann, president of ABBL, these state-guaranteed loans “constitute an additional tool in the range of solutions that banks can offer businesses, solutions that will help them overcome the effects of the pandemic and make so that the economy continues to revive ”.

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