Financial first aid measures adopted in Slovakia in response to COVID-19

By Ivan Sagál, Zuzana Jurickova

04-2020

Following the outbreak of COVID-19, the financial sector as well as the government are taking several actions to mitigate negative economic consequences in an effort to keep the financial system in a good condition.

Actions proposed by industry leaders

After the information provided by the regulator on the upcoming economic recession, banks are preparing for this situation by providing several measures such as offering short-term loans to businesses negatively affected by COVID-19 in order to avoid insolvency.

Further, some banks have already started to limit access to debt for some consumers and businesses mainly in relation to the financing of real assets and consumption spending.

Interest rates remain unchanged for now.

In case of any problems with debt repayment, it is advisable for debtors to keep lenders informed so that debt repayment solutions can be sought in more easily and in advance.

The Ministry of Finance shall provide financial help to small and medium-sized companies. This help shall be provided by the Export-Import Bank of the Slovak Republic as well as the Slovak Guarantee and Development Bank in the form of guarantees and payment of interests on existing loans.

Actions proposed by governments/States

Due to current negative economic impacts, it is possible for debtors to apply for the deferral of instalments of debt payments for up to 9 months.
The deferral of debt payment was also discussed with the Slovak Banking Credit Bureau ("SBCB") which maintains the register of debtors and their ability to repay the debt. Under standard circumstances, notification on debt deferral made with the SBCB may make access to credit more difficult for debtors in the future. However, after extensive negotiations with all relevant authorities there will be no negative notification with the SBCB in case of deferral of instalments of debt.

Securities cannot be enforced and sale auctions cannot be conducted until the end of April.

Reduced working hours and workforce: employees not going to work due to self-isolation, sickness, fear of risk of virus, children at home due to closed schools.