Micro and small business projects

Project Summary Documents

Project Summary Documents (PSDs) are disclosed for each project prior to Board consideration. They contain project descriptions, financial details, client information, environmental issues, tender guidelines, and contact details. PSDs for private sector projects are disclosed at least 30 days prior to Board consideration and for state sector projects, at least 60 days.

Project Summary Documents

Signed projects

Board approval is the final stage in the project approval process. After Board approval, the EBRD and the client sign the deal and it becomes legally binding. Signed project lists reflect year-end data.

Signed projects  (0.1Mb)

Case studies

Expanding the family business in Montenegro

Renowned as the centre of traditional Montenegrin cuisine, Cetinje is famous for its smoked ham (known locally as “prsuto”) and its cheeses. Visitors come from far and wide to try the local produce and to appreciate the attractions of this historical city, which lies at the foot of Mount Lovc´en, the Black Mountain, from which Montenegro gets its name. As the old capital of Montenegro, the city grew rapidly but its expansion was halted by the Balkan wars and the First World War. Today, it has a population of 15,000 and relies on tourism to generate much of its income.

Cetinje is on the verge of a revival but many of the city’s entrepreneurs struggle to get the financing that they need to build their businesses. One such entrepreneur is Nikola Martinovic´. Following in his father’s footsteps, Nikola had taken over the running of the family business but needed finance to expand his company’s production of prsuto and quality cheeses. So he turned to Alter Modus for assistance.

Alter Modus is a specialist microfinance institution that was originally set up to help refugees and internally displaced people. Back in the 1990s, these represented up to 20 per cent of Montenegro’s population. Nowadays they account for just over 4 per cent. From its humble beginnings, Alter Modus has quickly grown into a saviour for businesses in desperate need of financing. Operating as a non-governmental organisation, Alter Modus provides small loans (averaging €1,600) to people from all walks of life. In 2004 it became the first NGO to receive a loan from the EBRD. A sum of €1 million was provided under the US/EBRD SME Finance Facility.

The aim of Alter Modus is to help people with potential who have good business proposals. When assistance was sought by Nikola Martinovic´, it provided him with a loan of €1,500. Nikola used this to renovate his premises for drying ham and to purchase more meat. Another loan, of €3,000, was used to buy a 500-litre container for processing milk. This allowed Nikola to enter into an arrangement with a local dairy, from which he buys his milk on a daily basis.

A third loan, of €2,000, was used to further improve his facilities in response to the growing demand for his produce. Nikola says that the loans acted as a lifeline for him, allowing him to more than quadruple his cheese production within a very short period of time – he currently produces over 50 kilos of cheese a day. The loans enabled him to expand his business much faster than if he had relied on using profits from his normal business operations. His story is typical of many who have benefited from financing from Alter Modus, whose credit portfolio now stands at over €5 million.

Small finance brings big rewards

Mongolia, whose 2.5 million people inhabit a vast, landlocked land between Russia and China, urgently needs microfinance services to help its economy grow and alleviate poverty.

In keeping with its business plan to move further south and east, the EBRD accepted Mongolia as its newest country of operations in October 2006 and promptly signed its first commercial deal there – a €3.8 million loan to XacBank, a micro credit institution.

XacBank has more than 50,000 clients and makes 85 per cent of its loans to small businesses, many of them microfinance customers in rural areas. The bank is unconventional in accepting all kinds of collateral – including the “gers” or tents in which many Mongolian nomads still live – as pledges for loans.

Sersenjav Elbegzaya was an early beneficiary of XacBank financing. In 2003 she moved to Mongolia’s capital Ulaanbaatar. Recently widowed, Sersenjav decided to set up a business to help her family survive and to see her daughter through university. XacBank gave a €152 loan against her ger and home appliances. Two other loans followed as her business selling scarves and bags in the city’s open-air market expanded – each time double the previous amount, each loan increasing her profit. Her business continues to go from strength to strength.

“We started with a social mission, to provide credit to micro and small businesses,” explains XacBank’s President, Magvan Bold. “And we have become their most trusted partner.”

XacBank started in 1998 as a United Nations Development Programme “MicroStart” project, with an initial €0.8 million to lend to poor people with business ideas. XacBank’s capital has grown to €7.6 million with total assets of €58 million in 2006. It attributes this to its focus on the poor, who have proved to be reliable payers. Less than 1 per cent of XacBank’s loans are overdue for 30 days or more.

The EBRD’s €3.8 million loan will particularly benefit rural customers. A further €0.8 million that the Bank is providing in support of trade finance will cushion clients financing imports and exports. EBRD financing is expected to strengthen Mongolia’s financial sector – which will, in turn, benefit consumers, generate employment and improve living standards.

Although the EBRD only accepted Mongolia as a country of operations in October 2006, the Bank had been working with the country for some years through donor-funded projects. The Mongolian Cooperation Fund was set up in March 2001 with more than €10 million of donor funding.

Helping artisans in Tajikistan

Tajikistan, a country rich in culture and tradition, is renowned for its artisans and craftsmen. The fabrication of national head covers – tyubeteykas and embroidered wedding caps - is one of the old crafts, passed down from generation to generation. A Tajik or Uzbek wedding is impossible to think of without gold embroidered Tyubeteykas, Khalats and Chalmas.

Maston Kholmuradova, a resident of Tursunzade, is the offspring of a dynasty of craftsmen that specialize in gold embroidery. She sold her first self embroidered tyubeteykas 20 years ago. Since then her head covers, national wedding gowns and table and bed overlays are in high demand among the population of Tursunzade and in other regions of Tajikistan.

Alongside her three daughters, Maston Kholmuradova also trades other crafts that she buys in the Uzbek towns of Andijon, Kokand, Ferghona, Namangon and Marghilon.

As demand for head covers and other wedding paraphernalia grew Maston needed additional funds to get the necessary amount of raw materials and trade a wider variety of goods for such occasions. She received a USD 1,000 loan in the Tursunzade branch of TajPrombank.

"I learned from my friends, traders on the bazaar, who themselves have received a loan, that the bank is giving such loans. Quiet frankly, I was astonished, when in the course of only two days I got the loan without bureaucratic hassle. In fact, I still cannot believe it!!! And yes repaying the loan is not really the issue since my business will grow faster now."

Financing for farmers in Belgrade

Mr Veroljub Tosakovic carries out the family tradition of agriculture in a large farm situated 30 km south of Belgrade - a region well known for its farming. Veroljub’s farm has lots of diary cattle producing 350 liters of milk per day. 

Mr Tosakovic is currently expanding all of his activities and has purchased new machines to improve corn production and field work. Thanks to hard work, experience and investments in modernisation he also offers services to third parties.

He has one loan outstanding in amount of €3,000 with a repayment period of 18 months and approval of a further loan, in the amount of €8,000 maturing in 36 months, is imminent. This will be his third loan with the bank and he is also a guarantor for a group of four agricultural producers from the same village

Supporting entrepreneurs in Russia

In 1990, Ms. Teterina registered as a sole proprietor, rented a trading outlet in the local municipal market and started selling ladies underwear.  Initially, she was selling inexpensive items imported from China and Korea. The business developed rapidly and eventually she was able to buy two premises. She rented out one of the units and set up shop in the second selling top quality ladies underwear produced in Italy, Germany, and France.  Today, this shop “Tet-a-Tet” is one of the best in its class. 

The first loan of around USD 4,500 enabled the borrower to expand the range and switch to more expensive and better quality stock. With the proceeds of the second loan of approximately USD 20,000 Ms. Teterina expanded her trading space.