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International consortium backs Kosovo’s first licensed bank
PRISTINA, Kosovo -- Micro Enterprise Bank (MEB), the first bank to be licensed in Kosovo since last year’s conflict, today opened its doors to the public, meeting an urgent demand for financial services. MEB will provide account management, money transfers, loans and cashless payment transactions to micro and small enterprises, as well as individual customers.
MEB was founded at the initiative of several international financial institutions and investment companies, including Commerzbank AG, the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) and Internationale Micro Investitionen (IMI) and Kreditanstalt für Wiederaufbau (KfW). It will have an initial equity holding of EUR 2.3 million. Funding is provided to a substantial degree by the Dutch and German governments.
"Kosovo’s economic recovery will increasingly depend on the availability of basic banking services," said Horst Köhler, President of the EBRD, speaking in Pristina. "The Micro Enterprise Bank does just that, giving ordinary people the means to provide for their own livelihoods without resorting to handouts. It will also serve as a dependable, commercial-oriented source of credit for small businesses, which will form the backbone of a resurgent Kosovar economy."
IFC’s Director of the Central and Southern Europe Department, Harold Rosen stressed that this kind of project will create jobs and improve people’s lives. "A major impediment to growth has been the lack of access to credit which is one of the main vehicles for promoting economic growth. By demonstrating the commercial viability of properly structured and organized micro-lending institutions, we can catalyze considerable private investments to build credit and other financial services for many poor people in Kosovo."
Werner Frank, Senior Vice President at KfW said: "All the international organisations involved have shown a great strength of purpose and flexibility to get this institution off the ground. MEB is an excellent example of what can be achieved with the co-operation of committed partners."
Michael Barth, Managing Director of FMO, said: "Micro and small enterprises are looking for a single financial institution that can provide all of the financial products they need. They not only demand credit but also require deposit facilities and payment services. MEB’s initial focus therefore is to introduce account facilities and payment services, with lending activities to follow in a few months’ time." Mr. Barth also emphasized the importance to private sector development of healthy financial intermediaries'.
Jan Baechle, Senior Vice President at Commerzbank AG, said: "While the international public institutions among the founders focus on the development aid character of MEB Kosovo, Commerzbank AG – being the sole private bank among the shareholders and profiting by its worldwide presence – concentrates on the smooth handling of international money transfers and foreign trade transactions."
Since August 1999 a resident expatriate team, led by Internationale Projekt Consult (IPC) GmbH, has been working to set up MEB. The team’s main tasks were to establish a working relationship with the United Nations Mission in Kosovo (UNMIK), and to locate and renovate suitable business premises, as well as train staff.
"At the end of the conflict in Kosovo in June 1999, the province’s financial system was in a shambles, so we really had to start from scratch," said Koen Wasmus, the new General Manager of MEB. "We have provided intensive training to a number of young and highly motivated banking trainees – most of whom had no previous banking experience. They received on-the-job training with similar micro-credit banks in Albania and Bosnia. I expect that the first generation of local managers will be recruited from among this group."
MEB will be based in Pristina with a staff of 30. Branches are due to open soon in Prizren (early February) and Peje (March or April). After three years, the bank is expected to have seven branches.
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