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EBRD lends Alter Modus €2 million
Facility set up with US government will support entrepreneurs in Montenegro
Alter Modus, a non-bank micro finance institution dedicated to providing
finance to micro businesses in Montenegro, is receiving a €2 million loan from
a facility set up by the EBRD with the US government to help it reach even
more entrepreneurs. This builds on a €1 million loan to Alter Modus in 2004,
which has supported around 2,000 micro and small enterprises (MSEs) across
Montenegro.
Alter Modus provides loans to a specific niche of micro-entrepreneurs,
reaching out to the smallest and poorest of the business clientele. Its
selection criteria are MSEs with less than five employees and entrepreneurs
with households with a monthly income per capita of less than €250. The
average loan is around €1,500, which could rise to €8,000, supporting projects
ranging from trade to furniture production and transport services to
hairdressing. The loan will enable Alter Modus to diversify its product range
by providing further tailored loans to its clients, in areas such as
agriculture and tourism.
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 MSEs in Albania, Bosnia & Herzegovina,
Bulgaria, Croatia, Georgia, Kazakhstan, Kosovo, the Kyrgyz Republic,
Macedonia, Romania, Serbia & Montenegro, Tajikistan and Ukraine. The US
facility also provided technical assistance funds for areas such as
institution building, as well as for a survey of client satisfaction, which
will enable Alter Modus to improve its product range meeting its clients’
needs.
Chikako Kuno, Director for Small Business at the EBRD, said through
financially sustainable institutions like Alter Modus the Bank can support the
growth of smaller businesses which is a key element for the stable economic
growth for the region.
Established in 1999, and licensed and regulated by the Central Bank of
Montenegro, Alter Modus has disbursed close to 16,400 loans worth around €26
million. Today, the institution has a loan portfolio of €5.2 million with
5,400 clients, who are creating or expanding their businesses with the help of
finance from the institution. The quality of the portfolio is excellent with
less than 1 per cent of loans overdue by more than 30 days. The organisation
currently disburses around 540 loans a month up from 350 a year earlier.
Luka Djurovic, Credit Programme Manager at Alter Modus, said the second loan
from EBRD will enable the organisation to stay on course of its mid-terms
plans: to further strengthen the position in current local markets and to
expand to new regions reaching more clients in rural settings. This loan will
provide the seed money to double our operations over the course of next three
years. And finally, as it was the case with the first loan from EBRD, the
second loan is certain to provide a clear signal to other investors, and to
bring in new investments needed to execute our plans.
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