The European Investment Bank, the long-term lending bank of the European Union, has approved three loan contracts worth a total of EUR 110 million for microfinance-related projects in Bosnia and Herzegovina. EUR 50 million will be allocated to Intesa Sanpaolo Banka for small and medium sized enterprises (SMEs) and priority projects; EUR 50 million to Republic of Srpska Investment-Development Bank (IRBRS) for SMEs and local infrastructure projects; and EUR 10 million to LOK Microfinance for SMEs and start-up businesses.
Mr. Dario Scannapieco, the EIB Vice-President responsible for operations in Italy, Malta and the Western Balkans stated, “The EIB is already the leading international financial institution in Bosnia and Herzegovina and the Western Balkans region. The willingness shown today by the authorities will allow a further strengthening of this role, with the aim of helping the country along its path towards the European Union.”
By: Stefanie Rubin, Research Assistant
About the European Investment Bank (EIB):
The EIM was created in 1958 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 future Member States and EU Partner countries, principally in the area of small and medium-sized enterprises. In 2008, the EIB raised close to EUR 60 billion. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.”
About Intesa Sanpaolo Banka:
Intesa Sanpaolo Banka (ISB), formerly known as Upi Banka, was established in Bosnia and Herzegovina (BiH) in 1972 as an internal bank of the Associated Agriculture and Food Industries and Sales). In 1990, it registered as a shareholding company in a majority state ownership of 92 percent. The bank was privatized by 2000. In 2005, Banka Intesa became the majority shareholder of Upi Banka, with 35.03 percent ownership. In 2008, Upi Banka adopted its current name, Intesa Sanpaolo Banka.
Currently, Intesa Sanpaolo Banka has 5 branches and 45 operating units. It operates across the whole territory of BiH, the Federation of BiH, Republika Srpska and Brcko District.
About Republic of Srpska Investment-Development Bank (IRBRS):
IRBRS manages six public funds on behalf of the Government of Republika Srpska, including a housing fund, a development and employment fund, a development of the eastern part of the Republic of Srpska fund, a shares fund, a Republic of Srpska restitution fund and a real estate and claims fund. According to its website, “the main goal of IRBRS is to ensure financing of the projects which are important for the national economy and which were of no interest to the private sector because they do not make a direct profit (e.g. infrastructure) or demand large investments or are very risky… IRBRS is not going to provide funds directly to the beneficiaries, but through commercial banks and microcredit organizations.”
About Microcredit Foundation LOK (MCF LOK):
Founded in 1997, MCF LOK is a non-governmental organization that provides microloans in Bosnia and Herzegovina. In 2008, MCF LOK became a microfinancial organization under the Law on Microfinance Organizations. According to the MIX Market, the microfinance information clearinghouse, at year-end 2008, MCF LOK had a gross loan portfolio of USD 100.47 million, 44,452 active borrowers, an ROA of 5.69 percent and ROE of 51.3 percent.
Additional Resources:
Source Article: The Financial: “Bosnia and Herzegovina: EUR 110 Million to Boost Local Economy,” http://finchannel.com/news_flash/Banks/52810_Bosnia_and_Herzegovina:_EUR_110_million_to_boost_local_economy/
European Investment Bank: http://www.eib.org/about/index.htm
Intesa Sanpaolo Banka: http://www.intesasanpaolobanka.ba/INDEX/eng/o_nama.asp?id=5
EIB News: “European Investment Bank (EIB) lends EUR 470m to Intesa Sanpaolo for SMEs, research and the social sector,” http://www.eib.org/projects/press/2009/2009-149-banca-europea-per-gli-investimenti-bei-e-intesa-sanpaolo-470-milioni-di-euro-di-finanziamenti-a-favore-delle-pmi-della-ricerca-e-del-sociale.htm?lang=en
IRBRS Home: http://www.irbrs.net/Default.aspx?lang=eng
IRBRS FAQ: http://www.irbrs.net/faq_new.aspx?lang=eng&tip=0&oblast=irbrs
Microcredit Foundation LOK: http://www.lok.ba/?jezik=eng&x=139
Similar Posts:
- MICROCAPITAL BRIEF: Uzpromstroybank (UzPSB) Borrowing $15m from EBRD for SMEs in Uzbekistan
- MICROCAPITAL BRIEF: Mi-Bospo of Bosnia and Herzegovina Borrowing $2.2m from Grameen Credit Agricole Foundation for Microfinance Lending
- MICROCAPITAL BRIEF: Bank of Maldives Borrowing $40m from ADB, JICA, OeEB, for Blue Economy, SMEs, Tourism
- MICROCAPITAL BRIEF: UN, EU Supporting SMEs Involved in Fisheries in Cambodia via Capfish-Capture Program
- MICROFINANCE PAPER WRAP-UP: “Gendered Investment Differences Among Smallholder Farmers: Evidence from a Microcredit Programme in Western Kenya,” by Keiji Jindo et al
