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EBRD helps strengthen Serbian mortgage market
€10 million to Privredna Banka to help meet growing demand for finance
Serbian residents will gain more access to long-term finance to buy, build or refurbish their homes with the help of a €10 million loan from the EBRD to Privredna Banka, a small to medium-sized commercial bank in Serbia.
While Serbia’s mortgage market has grown rapidly over recent years, the sector is still significantly under-developed, accounting for less than 2 percent of the country’s gross domestic product, which is very low compared to other Central and Eastern European countries.
The EBRD finance will help meet a fast growing demand for loans and promote competition in the longer-term residential mortgage lending sector.
Privredna Banka will benefit from more long-term funding, allowing it to expand its product range and use the opportunity to become more active in a growing market. In addition, the bank will consolidate its experience and know-how in this area through a technical assistance programme of €190,000 associated with the loan. This additional funding will help the bank enhance the skills of its employees and improve its mortgage lending standards.
Since the first similar long-term mortgage loan was granted in 2004, with this latest loan the EBRD has lent four Serbian banks a total of €60 million to promote this sector, thus supporting the development of a competitive market.
There is clearly a large potential for developing the mortgage market in Serbia, said Jean-Marc Peterschmitt, EBRD’s Director for Bank Relationships. The EBRD is working with local banks like Privredna Banka, to strengthen their product offering and help stimulate competition for the benefit of Serbian homeowners, Mr Peterschmitt said.
Privredna Banka is a small to medium-sized commercial bank based in Belgrade. Founded in 1972, Privredna Banka today provides a wide range of products and services, with a specific focus on retail banking and SMEs.
For Privredna Banka, the mortgage development is a strategic orientation and we appreciate the support given to us by an international financial institution with high expertise in the mortgage sector. The implementation of the EBRD’s List of the Minimum Standards for Mortgage Lending will ensure full standardisation and high quality mortgage loans, Mr. Cedo Petrovic, Chairman and CEO, said.
The EBRD is one of the largest investor in Serbia, so far having committed over €1.2 billion in 73 projects.
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