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EBRD and EU supporting small businesses in Bosnia and Herzegovina

By Axel  Reiserer

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Two-year programme successfully implemented

The EBRD and the EU are successfully implementing the programme “Supporting competitiveness of small and medium enterprises in Bosnia and Herzegovina (BiH-SME-CSF)”. After one and a half years of the two-year project €15.7 million in EBRD/EU small business loans have been provided and participants are also expected to receive more than €4 million in grants from EU funds.

Small and medium-sized enterprises (SMEs) are central for economic development. Small businesses and entrepreneurship traditionally represent a source of growth. They are generators of jobs and contribute to improvements in production, work productivity and business efficiency.

The biggest problem of the private sector and SMEs, aside from administrative barriers, is the lack of capital. The experiences of developed countries suggest that entrepreneurs need to be provided with favorable financial incentives that would secure the funds for investments.

Ian Brown, EBRD Head of Office in Bosnia and Herzegovina said: “We are pleased with the success of the programme and grateful for the EU’s continuous support. We are complementary in our goals and our approach and working together allows us to make a real impact on the development of the economy in Bosnia and Herzegovina.”

“The European Union has established a long-lasting cooperation with the EBRD in the implementation of SME support programmes in Bosnia and Herzegovina by complementing EBRD loan funding with grants coming from IPA, the Instrument for Pre-Accession. These programmes have yielded impressive benefits. The EBRD experience in the EU's SME policy aims to create maximum benefits and further synergies by facilitating the introduction of EU standards through the provision of adequate advisory services as well as better access to finance”, said Andrea Vera, Head of Section - Economic Development, Infrastructure and Natural Resources, Delegation of the European Union to Bosnia and Herzegovina.

The current support from the EBRD and the EU is oriented towards increasing the competitiveness of small and medium-sized enterprises on local, regional and European markets through the harmonisation with EU directives and standards in the fields of occupational health and safety, environmental protection and product safety and quality.

As many as 58 projects have been financed by the EBRD credit line so far, 44 of which have already been finalised and verified, while five projects are yet to be verified over the next two months. The financed projects are in the fields of wood processing industry (22%), metal processing industry (12%) and food industry (10%).

The dairy “Padjeni” in Bileca is one of the companies that achieved the harmonisation with EU directives and its products have been available on the EU market since 2016. General Manager Nenad Vukoje said: “In order for a company to succeed in our market, it constantly needs to upgrade its production and products. To make that happen we need to invest in new technologies and new products. The EBRD/EU project has motivated us to complete an investment of BAM 1.6 million (€800.000) this year. We completed a facility with the capacity to process nearly 60,000 liters of milk a day into 30 different products. As part of the project, we managed to purchase a yoghurt bottle filling machine, an electric generating unit and the enlargement of our production hall facility.”

Since the start of its operations in Bosnia and Herzegovina, the EBRD has invested more than €2 billion in 146 projects in the country. The bank invests in infrastructural development, support to small and medium enterprises and strengthening of financial sector.

The European Union has invested more than €50 million in small and medium-sized enterprises in Bosnia and Herzegovina over the past 15 years. In 2018, further €15 million will be available to support  SMEs in sectors such as tourism, food industry, wood and metal processing.

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