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More entrepreneurs in Bosnia-Herzegovina to benefit from EBRD loans
€3 million to help strengthen MI-BOSPO’s lending capacity
The EBRD is extending another €3 million loan to Mikrokreditna Fondacija MI-BOSPO, one of the leading microfinance institutions in Bosnia and Herzegovina (BiH), to enable micro and small enterprises (MSEs) to gain more access to finance to start up or expand their businesses.
MI-BOSPO was established in 1996 as a non-governmental organisation and in December 2000 it was registered as a microfinance institution to provide financial support to low-income women in the northeastern part of BiH. Gradually men also became indirect clients of MI-BOSPO through association with a female in their households. Through its network of 28 offices, MI-BOSPO now serves around 30,000 clients both in urban and rural areas.
The new loan to MI-BOSPO follows the first credit line of €3 million provided by the EBRD to MI-BOSPO in December 2007. The first loan, which was fully disbursed, has served more than 1,700 new clients.
The finance falls under the €250 million EBRD Western Balkans and Croatia Financing Framework, which aims to facilitate access to finance for smaller business clients. It is also in keeping with the Bank’s new Gender Action Plan which seeks to increase the participation of women in private enterprise and in decision making roles in its countries of operation.
MI-BOSPO’s loan will be complemented by €300,000 in technical assistance from donors under the EBRD - Western Balkans Fund* and the newly established EBRD Shareholder Special Fund. This technical assistance support will be used to facilitate the company’s current restructuring from a non-profit organisation into a commercial organisation, reflecting a recently adopted law on micro-credit organisations passed in BiH. The assistance will focus on strengthening internal information technologies, audit/control processes, risk management, and MSE lending-specific processes.
EBRD President Thomas Mirow, visiting Bosnia-Herzegovina on his first official trip abroad as EBRD president, said that as the country’s economy grows it is important that micro and small entrepreneurs gain sufficient access to finance to meet their demands. This new loan to MI-BOSPO, an important partner for the EBRD, will help reach even smaller and more credit-constrained borrowers in rural parts of BiH, facilitating the growth of domestic production, Mr Mirow said.
Nejira Nalic, MI-BOSPO’s Director, said that for MI-BOSPO it is particularly important that the EBRD decided to support it with yet another loan and significant amount of funds to allow MI-BOSPO to reach out to even more self-employed and low income women entrepreneurs. What is also significant and timely is the technical assistance grant support for MI-BOSPO’s institutional development, which will allow it to grow further and meet new market challenges. MI-BOSPO intends to transform into a commercial microfinance company in order to meet its clients growing demands and to serve them even better with tailored products and services, Ms Nalic said.
This latest EBRD loan builds on the Bank’s continuing support for the micro enterprise sector in BiH, including loans to Mikrofin, EKI, Sunrise, Partner and Prizma. Since its first microfinance loan in 2006, the Bank has already extended a total of €48 million to six microfinance institutions in the country. Across its countries of operations, the EBRD has committed over €1.1 billion to 138 financial institutions, supporting more than 3 million micro and small businesses.
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* The following countries are donors to the EBRD-Western Balkans Fund: Austria, Canada, Czech Republic, Finland, Hungary, Ireland, Denmark, Luxembourg, Netherlands, Norway, Poland, Slovak Republic, Slovenia, Spain, Sweden, United Kingdom
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