EBRD, EU launch financing facility for underserved businesses in Montenegro

• EBRD and European Union launch portfolio risk sharing (PRS) facility in the Western Balkans at an event in Podgorica
• PRS is co-funded by the EU through its EFSD+ guarantee programme
• Facility will help local banks unlock lending to MSMEs at scale

The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) have today launched a new financing facility aimed at improving access to finance for micro, small and medium-sized enterprises (MSMEs) in Montenegro.

The portfolio risk sharing (PRS) facility was launched at an event in Podgorica and forms part of the EBRD’s broader efforts to support inclusive private-sector growth across the Western Balkans. It is co-funded by the EU through the European Fund for Sustainable Development Plus (EFSD+) guarantee programme.

Under the facility, the EBRD will provide local financial institutions with an unfunded risk-sharing guarantee covering up to 50 per cent of the credit risk on new loans. By sharing a portion of the risk, the Bank aims to reduce barriers to lending for MSMEs that may struggle to access finance due to issues such as a lack of collateral or their operating history.

The PRS has been recognised as an unfunded credit protection instrument by the Central Bank of Montenegro and provides capital relief for the part of the exposure secured by the EBRD guarantee. 

The facility aims to support more inclusive and balanced economic development by targeting underserved segments of the business community, including women-led and youth-led enterprises, as well as MSMEs operating in rural areas.

By strengthening banks’ capacity to lend using their own resources, the EBRD and EU are also supporting greater resilience in Montenegro’s financial sector and unlocking new financing opportunities for the private sector.

While the facility was officially launched in Montenegro, it is being rolled out across other Western Balkan countries as well. In Montenegro, the PRS facility is currently available through Crnogorska komercijalna banka (CKB).

Aleksandra Vukosavljević, EBRD Director for Financial Institutions for the Western Balkans and Eastern Europe, said: “This EU supported facility marks an important step in expanding access to finance for underserved businesses in Montenegro. By sharing risk and combining innovative financial instruments with targeted technical assistance, we are enabling more small businesses to invest, grow and strengthen their contribution to the economy.”

In addition to the risk-sharing guarantee, the facility is supported by EU-funded technical assistance and a first-loss counter guarantee provided under EFSD+.

Valentina Di Sebastiano, Programme Manager at the EU Delegation to Montenegro, said: “The EU is keen to support the development of the private sector, in view of Montenegro’s planned accession to the EU and integration into the EU single market. A vibrant private sector will ensure that Montenegro can take full advantage of the opportunities linked to accessing the EU single market of more than 450 million people. In this context, it is fundamental that MSMEs can have the financial means to adapt and grow. By providing the full strength of the guarantee of the EU resources, the EU will help local banks to more effectively support local companies, notably in riskier and more innovative sectors.”