EBRD and EU expand finance for small businesses in Montenegro

• €10 million package will improve access to finance for Montenegrin micro, small and medium-sized enterprises
• Project will support improvements in energy and resource efficiency and other green investment
• EU-backed loans will provide targeted assistance to women- and youth-led businesses

The European Bank for Reconstruction and Development (EBRD) is providing a €10 million financing package to Alter Modus, Montenegro’s leading microfinance institution, to improve access to finance for micro, small and medium-sized enterprises (MSMEs), including businesses led by women and young entrepreneurs.

The package comprises a €7 million loan for MSMEs, a €2 million loan under the Western Balkans Women in Business programme and a €1 million loan under the Western Balkans Youth in Business programme. This will enable Alter Modus to increase lending to private businesses across Montenegro, including firms outside the capital, Podgorica.

The Women in Business loan will expand access to finance for women-led MSMEs, while the Youth in Business loan will support MSMEs owned or led by entrepreneurs under the age of 35.

The European Union (EU) is supporting the Women in Business and Youth in Business loans through the European Fund for Sustainable Development Plus (EFSD+), providing first-loss risk cover and programme-level technical assistance. In addition to the EU, those two loans are also being supported by Luxembourg and Italy through the Central European Initiative.

The €7 million MSME loan will finance eligible private enterprises’ investment and expansion needs in Montenegro. At least 20 per cent of this financing is expected to support green investment, including improvements in energy and resource efficiency.

Ekaterina Solovova, the EBRD’s Head of Montenegro, said: “Micro, small and medium-sized enterprises are a key driver of Montenegro’s economy, creating jobs and supporting growth across the country. Through this financing package, we are improving access to finance for businesses that continue to face barriers to funding, particularly women-led and youth-led enterprises. Our longstanding partnership with Alter Modus and the support of the European Union will help entrepreneurs to invest, grow and create new opportunities in communities throughout Montenegro.”

Ana Kentera, the CEO of Alter Modus, said: “Our continued partnership with the EBRD allows us to reach more businesses across Montenegro and provide financing where it is needed most. This new €10 million package will help us better support small businesses, particularly those led by women and young entrepreneurs, as they grow and explore more sustainable business solutions. Together with our international partners, we remain committed to making financing more accessible and providing long-term support for our clients’ entrepreneurial ventures.”

Bernard Brunet, Head of Cooperation at the Delegation of the European Union to Montenegro, said: “The development of new, innovative companies is crucial for sustainable economic development in Montenegro, and will ensure that the country can take full advantage of the EU Single Market after accession. The guarantees provided by the European Union to the EBRD will ensure that Alter Modus can offer financial support package at competitive conditions and for clients who might otherwise face more constraints to access financial resources for developing their projects.”

Alter Modus, one of the country’s leading microfinance institutions, is a longstanding EBRD partner, having worked with the Bank in Montenegro since 2004.

The EBRD is a leading institutional investor in Montenegro, having invested €1.1 billion across 116 projects to date. Its investments support the country’s sustainable development, infrastructure, private-sector growth and regional integration.