The European Bank for Reconstruction and Development (EBRD) is launching its Trade Facilitation Programme (TFP) in Montenegro and signing two financing agreements with Hipotekarna Banka to support the development and diversification of the private sector in the country.
Under the agreement a loan of up to €2.5 million is being provided for on-lending to private micro, small and medium-sized enterprises (MSMEs), as access to long-term finance, especially in rural areas, remains a challenge. In addition, a €2.5 million mortgage loan is being extended to support long-term lending to residential borrowers to boost recovery of the housing market.
The funding is being arranged under the EBRD’s Western Balkans and Croatia Financing Framework, a €250 million programme aimed at supporting banks and non-bank financial institutions in Albania, Bosnia and Herzegovina, FYR Macedonia, Montenegro, Serbia and Croatia.
Furthermore, the EBRD is opening a trade finance line of €3 million for its first intermediary in Montenegro, Hipotekarna Banka, to finance foreign trade. Expanding trade is an important way of strengthening the local economy by creating opportunities for growth.
“The EBRD is pleased to strengthen the cooperation with Hipotekarna Banka and to support Montenegro’s real economy in the current challenging environment. Through this new financing we are supporting the development and diversification of the private sector and making it more resilient to continuing risks,” said EBRD Vice President and Chief Risk Officer, Betsy Nelson, at the signing.
“This is a very important step in our cooperation with the EBRD. These credit lines will provide us with additional funds to finance a broader range of companies in Montenegro, especially outside Podgorica, which is very important considering the needs of local small businesses. Furthermore, we will have an opportunity to explore new market segments with the new mortgage and trade facilitation credit lines,” said Hipotekarna Banka’s Chief Executive Director, Esad Zaimović.
Since the beginning of its operations in Montenegro, the EBRD has committed more than €400 million in approximately 40 projects, generating more than €800 million of investment in the country. EBRD investments cover the whole range of Montenegro’s economy.