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EUR6 million for micro and small businesses in Serbia
Entrepreneurs in Serbia will have access to more finance following a €6 million loan from the EBRD to ProCredit Bank, the first microfinance bank in Serbia. Through its branches and outlets in Belgrade, and in 15 other cities, ProCredit Bank will use the loan to on-lend finance to local citizens across the country wishing to expand their businesses.
The loan is being provided under the US/EBRD SME Financing Facility, a $150 million fund consisting of $50 million from the US Government and $100 million from the EBRD to support the growth of micro and small enterprises (MSEs) in Albania, Bosnia & Herzegovina, Bulgaria, Georgia, Kazakhstan, Kosovo, the Kyrgyz Republic, Macedonia, Romania, Serbia & Montenegro and Ukraine. A portion of the US contribution is also used to provide technical cooperation for institution building and training loan officers.
Established in April 2001, ProCredit Bank’s shareholders are the EBRD, the International Finance Corporation, Kreditanstalt fur Wiederaufbau, Commerzbank AG, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden, and Internationale Micro Investitionen AG.
Dragica Pilipovic-Chaffey, EBRD Director for Serbia and Montenegro, said micro and small businesses are critical for economic development in Serbia and ProCredit Bank plays a crucial role not only in satisfying their financing needs but also in providing a full range of banking services to this important target group. The EBRD’s support for ProCredit Bank has also another important benefit – showing other commercial banks how financing micro and small businesses can be viable when appropriate credit technology is applied, she added.
Christoph Freytag, General Director of ProCredit Bank, said the expansion of credit to MSEs through a tailored lending program underlines his bank’s commitment to this market. The EBRD loan should trigger further growth in ProCredit Bank’s loan portfolio, as well as increase access to finance for many more micro and small entrepreneurs in Serbia, he added.
ProCredit Bank provides micro loans for up to €10,000 (or the equivalent in dinars) with a maturity of up to 18 months. Small and medium loans of up to €500,000 (or the equivalent in dinars) are made with a maturity of up to 60 months. All loans are provided on a commercial basis.
As of the end of November, ProCredit Bank had disbursed over 16,000 loans for a total amount of over €120 million, and the average outstanding loan amount is below €6,000.
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