MICROCAPITAL BRIEF: Macedonia to Boost Usage of $129m Credit Line from European Investment Bank to Support Small and Medium-sized Enterprises

The government of Macedonia reportedly has announced plans to step up disbursements from a credit line of EUR 100 million (USD 129 million) from the European Investment Bank (EIB), the long-term lending bank of the European Union. So far, EUR 50 million (USD 65 million) has been disbursed to small and medium-sized enterprises (SMEs). The program is intended to reduce unemployment, assist local businesses and facilitate the country’s integration into the European Union. The interest rate of the credit line is set at 5.5 percent, and the government-owned Macedonian Bank for Development Promotion (MBDP) is disbursing retail loans at that same rate. Additional details on the loan program were not disclosed [1].

For the year 2011, four Macedonian microfinance institutions (MFIs) report to the US-based nonprofit Microfinance Information Exchange (MIX) aggregate total assets of USD 332 million, gross loan portfolios totaling USD 257 million, deposits of USD 200 million, approximately 13,500 active borrowers and 15,500 depositors. For the year 2011, MBDP reported total assets of MKD 10 billion (USD 210 million) [2]. The total subscribed capital of EIB is EUR 232 billion (USD 297 billion) as of December 2011. Since 1998, EIB has financed projects totaling EUR 330 million (USD 426 million) in Macedonia [3].

By Brendan Millan, Research Associate

About European Investment Bank (EIB)
The European Investment Bank (EIB) was created in 1958 and now serves as the long-term lending bank of the European Union. In addition to supporting projects in EU member states, its main priorities include financing investments in likely future member states and EU partner countries, principally in the area of small and medium-sized enterprises. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.” The total subscribed capital of EIB is EUR 232 billion (USD 297 billion) as at December 2011.

About Macedonian Bank for Development Promotion (MBDP)
Founded in 1988, MBDP is a government-owned development and export bank in Macedonia. The objectives of MBDP are to provide: (1) financing for export-oriented production and small and medium-sized enterprises (SMEs) and (2) insurance for export claims of SMEs. For the year 2011, MBDP reported total assets of MKD 10 billion (USD 210 million).

Sources and Additional Resources:

[1] FriedlNews: “Macedonia Fresh €100m for Business Sector from EIB”, http://www.friedlnews.com/article/macedonia-fresh-euro-100m-for-the-business-sector-from-eib

[2] Macedonian Bank for Development Promotion: “2011 Annual Report”, http://www.mbdp.com.mk/images/finansiski-izveshtai/godishni-izveshtai/eng-annual-reports/2011-annual-report.pdf

[3] European Investment Bank: “The Former Yugoslav Republic of Macedonia (FYROM)”, http://www.eib.org/projects/regions/enlargement/fyrom/index.htm

MicroCapital.org story, November 21, 2012, “Part of $38b Commitment From European Investment Bank, World Bank, European Bank For Reconstruction and Development To Support SMEs”, https://www.microcapital.org/microcapital-brief-part-of-38b-commitment-from-european-investment-bank-world-bank-european-bank-for-reconstruction-and-development-to-support-smes/

MicroCapital.org story, April 13, 2012, “International Finance Corporation (IFC) Loans $13m to Ohridska Banka of Macedonia to Increase Lending to Small and Medium-sized Enterprises”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-13m-to-ohridska-banka-of-macedonia-to-increase-lending-to-small-and-medium-sized-enterprises/

MicroCapital.org story, October 12, 2011, “European Fund for Southeast Europe (EFSE) Loans $8m to Mikrofin Banja Luka of Bosnia and Herzegovina, ProCredit Bank Macedonia to Support Micro-, Small and Medium-Sized Enterprises”, https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-8m-to-mikrofin-banja-luka-of-bosnia-and-herzegovina-procredit-bank-macedonia-to-support-micro-small-and-medium-sized-enterprises/

MicroCapital Universe Profile: European Investment Bank (EIB), https://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=European+Investment+Bank+%28EIB%29

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