EBRD Assists With Flood Recovery In Bosnia And Herzegovina, Croatia And Serbia

Targeted News Service |

LONDON, June 25 -- The European Union's European Bank for Reconstruction and Development issued the following news release: In a move designed to boost long-term lending to local businesses and private borrowers in the Western Balkans and Croatia, the European Bank for Reconstruction and Development (EBRD) is extending up to Euros500 million for on-lending to partner banks. The funds are being provided under the Western Balkans and Croatia Finance Framework IV (WBFF IV), structured to accommodate potential demand for additional financing as a result of the recent floods in Bosnia and Herzegovina, Croatia and Serbia. The EU, World Bank and UN are working with the authorities in the affected countries to prepare a damage assessment report over the next few weeks. The WBFF IV will provide credit lines as well as equity, hybrid instruments and guarantees to local banks and non-banking financial institutions in Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia, Kosovo, Montenegro and Serbia for on-lending to micro, small and medium enterprises (MSMEs) and private borrowers. It will also aim to expand underserved or new segments of the financial sectors, such as mortgage, leasing, factoring and consumer financing. The Framework is expected to support the financing of local MSMEs as they start to replace or repair assets damaged by the floods. MSMEs play an important role in the Western Balkans region but face constraints in accessing long-term finance. For instance, in Bosnia and Herzegovina only 22 per cent of private sector credit is available to local enterprises. This is a burden on the expansion of existing operations and the development of new market opportunities, which the EBRD financing aims to overcome. "The Western Balkans Finance Framework is a facility that builds on the EBRD's success so far in supporting MSMEs and strengthening the financial sector in the Western Balkans and Croatia. This is a very effective platform to support the underserved segments of the market, including mortgage loans and MSME lending. It is very important to strengthen the private and financial sectors across the region - especially now, when countries like Bosnia and Herzegovina, Croatia and Serbia are recovering from the damage inflicted by the recent floods," said Henry Russell, EBRD Director, Financial Institutions. The first two sub-projects under WBFF IV, totaling Euros50 million, will be extended to UniCredit Bank Serbia. The first will be a new loan of up to Euros40 million for on-lending to private SMEs. In parallel, a new mortgage loan of up to Euros10 million will be extended to increase financing for the private residential sector. UniCredit Bank Serbia is the third-largest commercial bank in the country. The Western Balkans and Croatia Financing Framework IV is an extension of the Western Balkans and Croatia Financing Framework, a Euros250 million facility aimed at supporting banks and non-bank financial institutions in Albania, Bosnia and Herzegovina, FYR Macedonia, Montenegro, Serbia and Croatia. The WBFF IV also includes Kosovo, which became a member and a country of operations of EBRD in 2012. Both frameworks are consistent with the EBRD's strategy for each of the Western Balkans countries and Croatia. They are also in keeping with the Bank's Financial Sector Strategy. TNS 30FurigayJane-140626-4779088 30FurigayJane

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