Further EBRD support for Bosnian micro enterprises
London, United Kingdom, March, 27 2008 -
The EBRD is providing a new €6 million loan to Mikrokreditna organizacija EKI, the third largest microfinance institution in Bosnia and Herzegovina (BiH), to help EKI expand its lending activities and further develop the organization.
The loan, which will be used by EKI to on-lend finance to entrepreneurs, falls under the €75 million EBRD Micro, Small and Medium Sized Enterprises Finance Framework for the Western Balkans and Croatia, which aims at facilitating access to finance for smaller business clients.
The EBRD extended its first €6 million loan under this framework in September 2006, helping EKI to increase its area of operations and the number of clients it serves.
Both transactions were complemented by an estimated €300,000 technical assistance programme from the Western Balkan Multi-Donor Fund*. This technical assistance will be used to facilitate EKI’s transformation into a commercial microfinance company. The funds are being used to focus on strengthening internal audit/control processes, risk management, product development as well as training of middle and senior management.
EKI was established in 1996 as a non-governmental organisation. In March 2001 it was registered as a microfinance institution licensed to provide financial support to micro entrepreneurs in BiH. Through its network of 12 branches and 27 sub-offices, EKI serves approximately 24,500 clients across the Federation of BiH, Republika Srpska and the Brcko District, both in urban and rural areas.
This latest EBRD loan builds on the Bank’s continuing support for the micro enterprise sector in BiH. Since its first microfinance loan in 2006, the Bank has already extended a total of €35 million to six microfinance institutions in the country. Across its countries of operations, the EBRD has committed over €1 billion to 133 financial institutions, supporting more than 2 million micro and small businesses.