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€4 million to MF Banka for small businesses in Bosnia and Herzegovina

By EBRD  Press Office

The EBRD is mobilising additional resources to increase the availability of finance to the real economy in Bosnia and Herzegovina by extending a €4 million loan to MF Banka for on-lending to micro and small enterprises (MSEs).

MF Banka is a subsidiary of Mikrofin LLC, the largest microfinance institution (MFI) in the country and the first MFI to complete the transformation into a commercial microfinance company. Mikrofin is also the first MFI to acquire a banking licence, which provides an example for other MFIs seeking to broaden the range of products and services they can provide to small businesses including savings products. The ability to raise deposits in local currency will also help diversify MF Banka’s sources of funds and make it possible to lend more in local currency for businesses which operate mostly in the local market.

The proceeds of the loan will enable MF Banka to support the real sector of economy by providing more financing at longer tenors for Bosnian MSEs. Likewise, the operational integration and synergy of MF Banka and Mikrofin, complemented by the EBRD finance, will enable MF Banka to offer their clients additional banking services that cannot be provided by MFIs (e.g. payment services, deposits, e-banking, etc) and to generate additional sources of revenue to ensure the companies operate on a commercially sustainable basis.

“We are very pleased to build on our long-standing successful cooperation with Mikrofin and welcome the participation of MF Banka into this project. The EBRD remains strongly committed to supporting small business in Bosnia and Herzegovina, and we hope that the present loan will further the development and transformation of the microfinance sector in the country,” said Libor Krkoska, Head of the EBRD office in Sarajevo.

The loan is complemented by nearly €380,000 in technical assistance from the EBRD Shareholder Special Fund and the Western Balkans Fund.

Since the beginning of its operations in Bosnia and Herzegovina, the EBRD has committed more than €1.4 billion in over 100 projects in key sectors of the country’s economy, mobilising additional investments of more than €1.6 billion.

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