EIF Signs Guaranty Deal to Back Micro-Borrowers in Montenegro

Jun 2017
Montenegro, June, 13 2017 - The European Investment Fund (EIF) said it has signed a guarantee agreement with Montenegrin lender Crnogorska Komercijalna Banka (CKB) to provide 5 million euro ($5.6 million) to 700 Montenegrin micro-borrowers in the country. The first transaction is the first one in Montenegro under the EU Programme for Employment and Social Innovation (EaSI), the EIF said in a statement last week.

EaSI is the EU programme supporting the bloc's objective of high-level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions. The EaSI guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the EIF.

“The European Commission is fully committed to promoting inclusive entrepreneurship in the fight against social and financial exclusion. I therefore warmly welcome today's agreement with CKB, which marks the first of its kind in Montenegro under the EaSI programme,” EU employment Marianne Thyssen said as quoted in the statement.

The product will take the form of an overdraft at the micro clients’ disposal up to 10,000 euro covered by a personal guarantee, the CEO of CKB, Pal Kovacs, said.

The agreement enables CKB to set up a new micro-credit product in form of an overdraft facility, which will allow disadvantaged micro-borrowers to withdraw additional funds. The micro-borrowers will not have to provide collateral requirements and will benefit from a reduction of the fees and the interest margin, EIF noted.

The EIF is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment.

CKB is a member of Hungary's OTP Group which is present in eight other countries in Southeastern Europe (SEE), serving altogether near 13 million of clients, in some 1,400 branches with 4,000 ATMs.

Source : See News

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