The European Bank for Reconstruction and Development (EBRD) is providing a new EUR 6 million (USD 9.1 million) loan to Mikrokreditna organizacija EKI (EKI), the third-largest microfinance institution in Bosnia and Herzegovina (BiH). The loan, which will be on-lent by EKI, is funded by the EUR 75 million (USD 114 million) EBRD Micro, Small and Medium Sized Enterprises Finance Framework for the Western Balkans and Croatia, which aims at facilitating access to finance for smaller business clients.
The EBRD extended its first EUR 6 million loan (USD 9.1 million) under this framework in September 2006, helping EKI to increase its area of operations and the number of clients it serves. Both transactions were complemented by an estimated EUR 300,000 (USD 450,000) technical assistance programme from the Western Balkan Multi-Donor Fund. This technical assistance will be used to facilitate EKI’s transformation into a commercial microfinance company. The funds are being used to focus on strengthening internal audit/control processes, risk management and product development as well as management training.
EKI was established in 1996 as a non-governmental organisation. In March 2001 it was registered as a microfinance institution (MFI) licensed to provide financial support to micro-entrepreneurs in BiH. Through its network of 12 branches and 27 sub-offices, EKI serves approximately 24,500 clients across the Federation of BiH, Republika Srpska and the Brcko District, both in urban and rural areas. EKI is a member of microfinance networks World Vision International and the Microfinance Centre for Central and Eastern Europe and the New Independent States. For yearend 2007, EKI reported to the Microfinace Information eXchange total assets of USD 126 million, a gross loan portfolio of USD 120 million, a debt-equity ratio of 427% and a return on assets of 7.46%.
EBRD was established in 1991 to encourage private sector development in central and eastern Europe and the ex-Soviet countries. It invests mainly in private enterprises, usually together with commercial partners, with the intent of building market economies and encouraging democracy. Since its first microfinance loan in 2006, the EBRD has extended a total of EUR 35 million (USD 53 million) to six MFIs in BiH. Across the region, the EBRD has committed over EUR 1 billion (USD 1.5 billion) to 133 financial institutions, supporting more than 2 million micro- and small businesses. It is owned by the European Investment Bank, the European Community and 61 countries. The EBRD-Western Balkans Multi-Donor Fund is supported by Austria, Canada, the Czech Republic, Finland, Hungary, Ireland, Luxembourg, Netherlands, Norway, Poland, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom.
Similar Posts:
- MICROCAPITAL BRIEF: EU Guaranteeing $113m to Support $490m in Lending by EBRD to MSMEs in Eastern Europe, North Africa, Western Asia
- MICROCAPITAL BRIEF: EBRD Loans KICB $7m for MSME Financing in Kyrgyzstan
- MICROCAPITAL BRIEF: Uzpromstroybank (UzPSB) Borrowing $15m from EBRD for SMEs in Uzbekistan
- MICROCAPITAL BRIEF: EBRD Loaning $5m to ING Finansal Kiralama for Leasing for Energy Efficiency, Renewables in Turkiye
- MICROCAPITAL BRIEF: EBRD Offering AgriAcademy Graduate-level Education Courses in Ukraine to Boost Agriculture Sector
