WASHINGTON, September 19, 2014 — The World Bank’s Board of Directors today approved a EUR70 million (US$95.55 million) loan to the Republic of Croatia for the Social Protection System Modernization Project aimed at improving the efficiency and effectiveness of social assistance and services to the country’s most vulnerable groups.
Croatia is going through a prolonged recession, which has led to an increase in poverty. Social protection spending has been largely protected during this period, however, the social protection system has become fragmented and costly to administer. To address the weaknesses of the system, the Government adopted a new Social Welfare Act, which provided the legislative basis to initiate a wide-ranging set of reforms of the social protection system
The Project will support the implementation of reforms in five key areas necessary to improve the social protection system. These are: (i) consolidation of social assistance benefits administration under a one-stop-shop, providing a single service point to social assistance beneficiaries to apply for and receive a range of cash benefits; (ii) unification and harmonization of certification of disability, resulting in faster, more transparent and more efficient certification process for applicants; (iii) reduction of error, fraud, and corruption in social protection benefits; (iv) de-institutionalization of vulnerable children and adults by increasing family-type environments outside of the institutions and improving care and quality standards for these groups; and (v) provision of more tailored services to the unemployed and long-term unemployed to help them return to the labor market
“We are very pleased to support the Croatian Government in its efforts to make the provision of social protection services to the most vulnerable groups better targeted, better organized, and less of a strain on public finances. This is especially important during periods of economic downturn when the demand for social protection is on the rise, while the resources to finance it are increasingly scarce,” said Mamta Murthi, World Bank Regional Director for Central Europe and the Baltic Countries
The Euro denominated fixed spread loan has a final maturity of 20 years, including a grace period of four years
Since joining the World Bank in 1993, Croatia has benefited from financial and technical assistance, policy advice, and analytical services provided by the global development institution. To date, the World Bank has supported 53 operations amounting to around US$3.5 billion, and approved 53 grants with a total value of US$70 million