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Small and medium-sized enterprises to benefit from innovative new EBRD trade facility
Small and medium-sized enterprises in the Former Yugoslav Republic of Macedonia will be better able to finance the importation of goods and raw materials needed to produce for export, under a trade facilitation project signed on 19 May in Skopje between the European Bank for Reconstruction and Development and the Komercijalna Banka A.D. The EBRD has established a US$ 10 million facility to guarantee Komercijalna Banka's designated correspondent banks against non-payment under confirmed letters of credit.
Ron Freeman, First Vice President of the EBRD, said: "This facility represents a new product for the EBRD. Through our unique ability to extend guarantees to facilitate trade, we can help Komercijalna Banka secure credit facilities from its correspondent banks and help its clients stimulate production and increase exports."
The first four correspondent banks initially designated by Komercijalna Banka are Deutsche Bank, Swiss Bank Corporation, Turkiye Garanti Bankasi and Citibank. The facility gives Komercijalna Banka the flexibility to substitute or add additional correspondents. The EBRD facility will enable Komercijalna Banka to operate its documentary credit activities according to normal international banking procedures since the facility will be accompanied by a technical assistance programme which will further enhance Komercijalna Banka's skills in this area.
The Board of Governors of the EBRD, at its Annual Meeting in St Petersburg, Russia, in April, strongly endorsed a more active role for the Bank in trade facilitation. This transaction exemplifies the Bank's strategy of enhancing the creditworthiness of local financial intermediaries so that they gain access to the international markets, thus stimulating trade flows.
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