The European Union and the European Bank for Reconstruction and Development (EBRD) have announced a new financing platform for micro, small and medium-sized enterprises in Bosnia and Herzegovina, alongside ProCredit Bank d.d.
The portfolio risk-sharing facility aims to increase lending capacity to businesses that face barriers in accessing credit.
Under the terms of the agreement, the EBRD will provide an unfunded portfolio guarantee of up to €20 million. This will cover 50% of the credit risk on a newly created loan portfolio of up to €40 million.
‘Backbone of the economy’
“MSMEs are the backbone of the economy in Bosnia and Herzegovina, yet access to finance remains a key constraint on their growth,” commented Stela Melnic, head of the EBRD in Bosnia and Herzegovina.
“Through this new risk-sharing facility with ProCredit Bank, we are helping to unlock fresh lending to businesses that drive employment, innovation and resilience, while supporting greener and more inclusive economic development.”
The facility is supported by the EU through the European Fund for Sustainable Development Plus, which provides a first-loss risk cover. This mechanism is intended to encourage additional private-sector lending by lowering exposure to potential losses.
A portion of the financing will also be directed toward projects aligned with environmental criteria. At least 25% of the supported loan portfolio is expected to fund activities that meet the EBRD’s Green Economy Transition standards.
‘Provide support’
“Access to finance in Bosnia and Herzegovina is still not evenly distributed, particularly for micro and small businesses, companies outside major urban centres, and entrepreneurs in early stages of development,” commented Amir Salkanović, chairman of the management board, ProCredit Bank.
“This type of risk-sharing structure allows us to deliberately expand into these segments and provide support where it is most needed. Our focus remains unchanged, financing sustainable, real-sector projects and acting as a long-term partner to the domestic economy.”
Since commencing operations in Bosnia and Herzegovina, the EBRD has invested more than €3.4 billion across 265 projects, covering infrastructure, financial systems and business development. Read more here.
