Empowering female entrepreneurs in Bosnia

By Bojana Reiner

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Small Bosnian businesses grow

The EBRD is supporting a scheme that helps small businesses in Bosnia develop and flourish. In particular, the scheme focuses on empowering female entrepreneurs.

As Director of BOSPO, a humanitarian organisation that was helping displaced women deal with the emotional wounds of the Bosnian war, Nejira Nalic´ visited a group of female refugees in Tuzla, northern Bosnia, in 1995. This is where she met Nezira Mustafic´, Ajsa Mustafic´ and Sabina Mujic´ – three female farmers who had lost their homes in the war and were now receiving basic humanitarian assistance just to help them get on with life. Asked how they survived, Ms Mustafic´ said: “We use some of the aid to support our families and the rest we sell or exchange for other goods.”

Ms Nalic´ realised that, apart from a survival instinct, these women had an entrepreneurial spirit and a business sense. Humanitarian aid was not enough. Set up by the Danish Refugee Council in 1995 to provide displaced women in northern Bosnia and Herzegovina with psychological and social services, BOSPO began to focus on the growing number of women who were trying to increase their family income with small investments in trade and different service activities.

“We realised we had to enable them to begin a new life after the war. We started thinking about ways these skilled women could earn money, what they could do to provide for their existence and how we could help,” Ms Nalic´ says.

EBRD loans for female entrepreneurs

In 1996, with the help of a grant from the World Bank, a pilot project – MI-BOSPO – was created and the first microcredits were issued. And now the EBRD is supporting the development and commercialisation of that programme. “Our vision was to empower women in a sustainable way – by providing loans to allow a large number of low-income women to finance economically viable activities. From the very beginning it was important to establish trust and ensure that the loans would be repaid,” Ms Nalic´ says. Loans were offered on a solidarity basis – groups of women who knew each other well would form solidarity groups that allowed them to guarantee the loans on each other’s behalf.

This allowed Nezira, Ajsa and Sabina to borrow 1,000 German marks each, guaranteed by the others. Nezira bought a cow. She would use some of the cow’s milk to feed her family, sell the rest and use the extra money to set up a craft shop with her husband. Ajsa relied on the loan to make clothes and sell them through relatives in Germany. She used the extra money to build a house and to send her daughters to school. Sabina needed her loan to purchase new material for her home-based hairdressing salon and to offer better services to clients.

Success breeds success

Good results and repayment of the loans justified MI-BOSPO’s existence and paved the way for the development of a microcredit programme over the next four years. In 2000, MI-BOSPO was transformed into a non-profit microcredit organisation providing financial services to low-income female entrepreneurs. MI-BOSPO’s transformation was a reflection of the changes that Bosnian society was undergoing. At the height of the war, 90 per cent of MI-BOSPO’s clients were just like Nezira, Ajsa and Sabina. They borrowed small amounts to meet basic economic needs and repay the loans.

“In 1996, very few people believed that one of the ways of helping low-income displaced women was to provide credit and spark entrepreneurship among women,” Ms Nalic´ says. But as memories of the war began to fade, more and more women approached MI-BOSPO for loans intended to start or expand their activities in farming, trade, production and services. “People were developing an understanding for our mission, society around us was changing,” Ms Nalic´ says.

Today MI-BOSPO is providing loans to 25,000 women who typically borrow between €500 and €15,000. Many are investing in the development and expansion of more sophisticated businesses. Senada Selimbasic´ from Tuzla has been a client of MI-BOSPO for more than 10 years. She established a small accounting business in 1997 with the help of her first credit of 1,200 German marks. Ten years later she borrowed €15,000 to expand her accounting practice which now employs four people and serves a number of well-established clients.

These kinds of successes helped Ms Nalic´ and her colleagues drive the organisation forward as a sustainable, commercially oriented financial institution. “MI-BOSPO’s vision is to become the financial services provider of choice for female entrepreneurs in Bosnia and Herzegovina,” Ms Nalic´ explains. Realising its potential to serve a vibrant and dynamic microcredit sector in Bosnia and Herzegovina, an EBRD priority, the Bank is helping MI-BOSPO with a €3 million loan to build a corporate future as a strong, commercial and sustainable financial institution.

Improving financial services

The loan will be complemented by technical assistance from the EBRD's Western Balkans Fund and Shareholder Special Fund to help MI-BOSPO adapt to the changing demands of a market economy. The money will be used to strengthen internal information technologies, to audit and control risk management and processes associated with micro and small enterprise lending. “The EBRD loan will assist MI-BOSPO in serving even more clients and supporting the underdeveloped market for financing women entrepreneurs. We believe that providing financial services for the needs of micro and small clients will play a significant role in the total reconstruction and transition of Bosnia and Herzegovina”, says Chikako Kuno, Director of the EBRD’s Group for Small Business.

“The microcredit sector in Bosnia and Herzegovina is a unique success story. It demonstrates the importance of private humanitarian initiatives which developed into innovative financial service providers that serve an important and dynamic segment of the economy,” says Giulio Moreno, EBRD’s Director for Bosnia and Herzegovina.
Twelve years after its establishment, MI-BOSPO is seen as a strong and prosperous institution, guided by a mission to ensure sustainable progress for energetic, entrepreneurial women. By supporting successful businesswomen, MI-BOSPO is helping to build a long term and sustainable future for the whole of Bosnia and Herzegovina.

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