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New boost for Bosnian micro enterprises
€8 million to help strengthen Partner’s lending capacity
The EBRD is lending Mikrokreditna Organizacija Partner, one of the largest
microfinance institutions in Bosnia and Herzegovina (BiH), €8 million to
enable owners of micro and small enterprises to gain more access to finance to
start up or expand their businesses.
The loan, which will be used by Partner for on-lending to entrepreneurs, falls
under the €75 million EBRD Micro, Small and Medium Sized Enterprises Finance
Framework for the Western Balkans and Croatia, which aims to facilitate access
to finance for smaller business clients.
Partner’s loan will be complemented by a €500,000 in technical assistance from
donor countries under the EBRD - Western Balkans Fund*. This technical
assistance will be used to facilitate the company’s current restructuring from
a non-profit organisation into a commercial organisation, reflecting a new law
on micro-credit organisations recently passed in BiH. The assistance will
focus on strengthening internal audit/control processes, risk management,
product diversification, development of financial and management policies and
procedures and MSE lending-specific credit scoring processes.
Partner was established in April 1997 as a non-governmental organisation. In
December 2000 it was registered as a microfinance institution licensed to
provide financial support to micro entrepreneurs in BiH. Through its network
of 43 offices, Partner serves more than 40,000 clients both in urban and rural
areas.
Peter Reiniger, the EBRD Business Group Director for Central Europe, Western
Balkans and Telecommunications, said Partner, with a portfolio of exclusively
business clients, is playing a crucial role in supporting a vibrant and
entrepreneurial micro and SME sector which in the long run should become the
backbone of BiH’s economy. Partner is an important institution that is
assisting entrepreneurs across urban and rural Bosnia and Herzegovina with
access to finance and the Bank supports their plan to transform into a
countrywide commercial microfinance company within the next 2 years, said Mr
Reiniger.
Senad Sinanovic, Partner’s General Manager, stressed that the EBRD loan
supports the further development of Partner by strengthening its institutional
capacity and financial potential. This will help Partner offer financial
services to an increasing number of micro and small enterprises. It also
supports the company’s transformation from a not-for-profit to a commercial
organization. The Board of Governors, Management and all Partner’s employees
are certain that the business relationship between Partner and EBRD will
enhance Partner’s competitive position in the BiH microfinance market.
This latest EBRD loan builds on the Bank’s support for the micro enterprise
sector in BiH. So far, the Bank has extended loans to Mikrofin, EKI, and
Sunrise. In addition, the EBRD-Italy Western Balkans Local Enterprise
Facility allows the Bank to contribute to the economic recovery of selected
Western Balkan countries through the direct provision of mainly equity and
quasi equity financing to small and medium local enterprises. Across its
countries of operations, the EBRD has committed over €835 million to 105
financial institutions to support more than 2 million small and micro
enterprises.
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