SARAJEVO, Bosnia (October 22,2008) - The European Bank for Reconstruction and Development (EBRD) is extending another €10 million loan to Mikrokreditna Fondacija Partner, one of the leading microfinance institutions in Bosnia, to enable micro and small enterprises (MSEs) to gain more access to finance to start up or expand their businesses.
Partner was established in 1997 as a non-governmental organisation supported by Mercy Corps and in December 2000 it was registered as a microfinance institution to provide financial support to low-income entrepreneurs across Bosnia. Through its network of 43 offices, Partner now serves around 60,000 clients both in urban and rural areas.
The new loan to Partner follows the first credit line of €8 million provided by the EBRD to this institution in June 2007. The first loan, which was fully disbursed, has served more than 3,000 new clients.
The first loan provided by the EBRD to Partner was complemented by €500,000 in technical assistance from donors under the EBRD - Western Balkans Fund. This technical assistance support will be used to facilitate the company’s current restructuring from a non-profit organisation into a commercial organisation, reflecting a recently adopted law on micro-credit organisations passed in Bosnia. The assistance will focus on strengthening internal information technologies, audit/control processes, risk management, and MSE lending-specific processes.
Chikako Kuno, Director of Group for Small Business at EBRD, said that in times of constrained liquidity it is important that micro and small entrepreneurs gain sufficient access to finance to meet their demands. This new loan to Partner, an important partner for the EBRD, will help reach even smaller and more credit-constrained borrowers in rural parts of Bosnia, facilitating their growth of domestic production,Kuno added.
This latest EBRD loan builds on the Bank’s continuing support for the Bosnian micro enterprise sector, including loans to Mikrofin, EKI, Sunrise, MI Bospo and Prizma. Since its first microfinance loan in 2006, the Bank has already extended a total of €51 million to six microfinance institutions in the country. Across its countries of operations, the EBRD has committed over €1.1 billion to 138 financial institutions, supporting more than 3 million micro and small businesses.