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EBRD provides € 7million loan plus trade guarantee line to Serbia's Metals Banka
The EBRD is lending Metals Banka, a private bank in Serbia, €7 million to give
small and medium-sized enterprises (SMEs) more access to finance to build or
develop their businesses. In addition, the Bank is providing a trade guarantee
line of €1 million to enable the bank to facilitate regional trade with local
entrepreneurs.
The loan falls under the Western Balkans SME Finance Facility, a €50 million
framework approved by the EBRD to finance SMEs in Albania, Bosnia and
Herzegovina, FYR Macedonia, Kosovo, Serbia and Montenegro. The European Agency
for Reconstruction is providing technical cooperation funds to provide
hands-on training in reviewing and developing credit procedures for loans,
monitoring, risk management, marketing and product development. The trade
guarantee line falls under the EBRD’s Trade Facilitation Programme,
established in 1999 to support trade to, from and within the EBRD’s countries
of operations.
Dragica Pilipovic, the EBRD country director for Serbia at the EBRD, said this
loan will help Metals Banka overcome lending constraints caused by the lack of
medium and long-term funding. Until now, Metals Banka has financed all its
operations from its own resources, equity and deposits. However, those are no
longer sufficient to finance a growing demand from clients, especially demand
for loans up to 3 to 5 years that cannot be funded by the bank’s short-term
deposits.
Metals Banka’s clients include a number of import and export companies
requiring trade finance instruments but face the constraint of cash collateral
required by Western banks. The trade guarantee line is in an important element
of the financing package that will help Metal Banka’s clients in developing
their trading opportunities, said Ms Pilipovic.
With its headquarters in Vojvodina, Metals Banka operates through 62 branches
across Serbia. The bank is a strong supporter of SMEs, and will use the EBRD’s
loan to build on this reputation by on-lending finance to more entrepreneurs.
The EBRD is one of the largest investors in Serbia, having committed more than
€990 million in around 64 projects.
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