MICROCAPITAL BRIEF: MF Banka Receives $5.2m from European Bank of Reconstruction and Development for Small Businesses in Bosnia, Herzgovina

The European Bank of Reconstruction and Development (EBRD), a UK-based funder of institutions that support micro- and small businesses, recently disbursed EUR 4 million (USD 5.18 million) to MF Banka, a subsidiary bank of Bosnian and Herzegovinian microfinance institution (MFI) Mikrofin. The EBRD financing is intended to allow Mikrofin to offer additional banking services through MF Banka, such as deposits and e-banking. In addition to being helpful to clients, the collection of deposits is meant to increase institutional sustainability and allow for longer term financing for clients. EBRD will additionally provide technical assistance worth EUR 380,000 (USD 492,092).

Mikrofin, a Bosnian and Herzegovinian MFI, reports providing financial services to 36,562 active borrowers, total assets of USD 127 million, a gross loan portfolio of USD 103 million, return on assets of 1.11 percent and return on equity of 4.18 percent as of 2011. Since EBRD began operations in Bosnia and Herzegovina in 2001, it has provided EUR 1.4 billion (USD 1.8 billion) to approximately 100 projects helping mobilize investments of approximately EUR 1.6 billion (USD 2.07 billion). In 2011, EBRD disbursed a total of EUR 6.7 billion (USD 8.3 billion).

By Sarah Benali, Research Associate

About Mikrofin Banja Luka
Mikrofin Banja Luka, established in 1999, is a microfinance institution (MFI) based in Bosnia and Herzegovina. It aims to “provide appropriate financial services to economically-active, low-income people that can make a profit and make it possible for them to become economically independent.” As of 2011, Mikrofin reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 127 million, a gross loan portfolio of USD 103 million, return on assets (ROA) of 1.11 percent, return on equity (ROE) of 4.18 percent and 36,562 active borrowers.

About EBRD
The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and more recently in Southern and Eastern Mediterranean region. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2011, EBRD disbursed a total of EUR 6.7 billion (USD 8.3 billion).

Sources and Additional Resources

EBRD Press Release: “EBRD extends a €4 million loan to MF Banka for small businesses in Bosnia and Herzegovina,” September 2012, http://www.balkans.com/open-news.php?uniquenumber=156249

MicroCapital.org Story: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development Loans $10m to Partner Microcredit Foundation of Bosnia and Herzegovina,” July 10, 2012, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-loans-10m-to-partner-microcredit-foundation-of-bosnia-and-herzegovina/

MicroCapital.org Story: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development Lends $6.7m to Sparkasse Bank BiH of Bosnia and Herzegovina to Support Small and Medium-Sized Enterprises,” October 11, 2011, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-lends-6-7m-to-sparkasse-bank-bih-of-bosnia-and-herzegovina-to-support-small-and-medium-sized-enterprises/

MicroCapital Universe Profile: EBRD
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe Profile: Mikrofin Banja Luka
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mikrofin+Banja+Luka

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