Provision of a senior unsecured loan of up to EUR 3.0 million to be made available in two tranches to Alter Modus ("AM") under the Western Balkans Youth in Business ("WB YiB") Programme. The second tranche will be uncomitted.
The loan proceeds will be used for on-lending to eligible micro and small-sized enterprises ("MSEs") whose overall operational management responsibility or majority ownership is held by a person (or persons) under the age of 35 ("Youth MSEs") in Montenegro in accordance with the Policy Statement.
ETI score: 72
The project contributes to the objectives of the FIF, supporting the Transition Impact qualities of Inclusive and Competitive:
Inclusive: The project will contribute to the economic inclusion of young enteprenuers by supporting Youth MSEs' access to finance and business advisory services, while demonstrating the business case for scaling-up lending to the Youth MSE segment.
Competitive: Transition impact is expected to derive from market expansion and through building a more competitive financial sector by strengthening the capacity of the Partner Financial Institutions (PFIs) for financing Youth MSEs.
MIKROKREDITNA FINANSIJSKA INSTITUCIJA ALTER MODUS DOO
MIKROKREDITNA FINANSIJSKA INSTITUCIJA ALTER MODUS DOO is the largest micro-finance institution (MFI) in Montenegro. It is 100%-onwed by NGO Alter Modus. AM holds a market share of 67% by total assets and 58% by customer loans in the MFI sector as of YE2021. It serves 18,391 clients through 18 branches and outlets across the country. It is focused on loans to entrepreneurs, MSEs, employed persons and pensioners.
EBRD Finance Summary
Total Project Cost
Additionality is achieved by combining the necessary long-term financing with TC and First Loss Risk Cover into a package that promotes investment in Youth MSEs in Montenegro.
Furthermore, AM will make use of EBRD expertise for the adoption of gender standards and equal opportunities action plans. In particular, AM will support the EBRD's policy dialogue and actively participate in the events and workshops aimed at improving their understanding of the segment and the challenges that women face in accessing finance as part of the EBRD-led nation/region-wide public-private policy dialogue activities.
Environmental and Social Summary
Categorised FI (ESP 2019). Alter Modus is an existing client of the Bank and its environmental and social (E&S) performance has been satisfactory to date as evidenced by annual reporting on environmental and social matters (including the 2021 AESR). A Human Resources policy was developed in 2018. The 2016 Environmental and Social Policy will be revised by end 2022 to align with the EBRD Exclusion List, as captured in the Loan Agreement. Alter Modus is offering microfinancing services largely for the Services segment with an average loan size of 2,800 €; this is considered as low E&S risk.
In the context of this new transaction, Alter Modus will be required to continue to comply with Performance Requirements 2, 4 and 9, and to apply EBRD's E&S Risk Management Procedures for Corporate and SME loans. Alter Modus should continue to provide annual E&S reporting to the Bank on compliance with the applicable PRs and any other E&S matters arising during the year.
Technical Cooperation and Grant Financing
TC: The Programme is supported by TC funds, provided by the government of Sweden, in the amount of EUR 3.54 million (total for the Programme), and in this case will support AM's capacity building and also Youth MSEs.
Non-TC: Up to EUR 0.30 million is provided by EBRD Shareholders Special Fund in the form of First Loss Risk Cover to AM in accordance with the Policy Statement.
Company Contact Information
+382 20 655 280
+382 20 655 260
Ul. Vucedolska br. 15 81000, Podgorica Montenegro
PSD last updated
11 Aug 2022
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