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EBRD supports micro enterprises in BiH
Loan helps strengthen EKI lending capacity
The EBRD is lending to Mikrokreditna Organizacija EKI, the third-largest
non-bank micro finance institution in Bosnia and Herzegovina (BiH), €6 million
to enable owners of micro and small enterprises to gain more access to finance
to expand or build their businesses.
The loan, which will be used by EKI to on-lend finance to entrepreneurs, falls
under the recently established €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. EKI’s loan
will be complemented by an estimated €250,000 in technical assistance from
donor countries, which will help, among other things, its transformation into
the commercial sector, reflecting a new law on micro-credit organisations
recently passed in BiH.
Chikako Kuno, EBRD Director for Small Business, said EKI, with the majority of
its clients in the rural and agribusiness sectors, is playing a crucial role
in helping to develop areas beyond major towns and cities. It is an important
institution that is helping entrepreneurs across rural Bosnia and Herzegovina
to gain more access to finance, and its business plan to transform into a
countrywide commercial micro credit company within the next 3-5 years is
welcomed by the Bank, said Ms Kuno.
EKI was initially established in 1996 as a non governmental organisation. In
March 2001, it was registered as a micro finance institution licensed to
provide financial support to micro entrepreneurs in BiH. Throughout its
network of 10 branches and 25 offices, EKI serves approximately 27,200 clients
across the Federation of BiH, Republika Srpska and District Brcko, both in
urban and rural areas.
Sadina Bina, EKI Director, stressed the importance of micro loans for poverty
reduction since they provide opportunities for low income populations to
establish or develop businesses that generate income and improve living
standards. EKI will focus on improving its market share to support the micro
enterprise sector, and the new Microfinance Law will enable EKI to provide a
wider range of services to increase its client base, added Ms Bina.
This latest EBRD loan builds on the Bank’s support for the micro enterprise
sector in BiH. Just last month the Bank lent Mikrofin, the largest non-bank
micro finance institution in BiH €8 million to help fund micro enterprises.
Across its countries of operations, the EBRD has committed over €620 million
to 80 financial institutions, supporting more than 1 million micro and small
businesses.
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