The European Bank of Reconstruction and Development (EBRD), a multilateral institution headquartered in London, England, recently announced that it will extend a guarantee facility of RSD 1.15 billion (USD 10.6 million) of a credit line totaling RSD 2.3 billion (USD 21.2 million) to be disbursed by Société Générale Serbia, a subsidiary of the France-based financial institution Société Générale, to rural microenterprises in Serbia. The credit line will aim to support financial inclusion of rural areas of the country through a partnership with AgroInvest Serbia, an affiliate of US-based NGO VisionFund International.
Matteo Patrone, EBRD’s director for Serbia, said that “this is an important project for the EBRD in Serbia as it has wider resonance in terms of the overall development of the financial sector in the country and it fosters growth by facilitating access to finance for small entrepreneurs, who are the backbone of the Serbian economy”[1]. Stanislas Tertrais, the “EB Vice President”[1] at Société Générale Srbija, added that “with a third of the population without access to bank services, Serbia has a huge need and potential for financing small and micro entrepreneurs and businesses. With that in mind, Société Générale Srbija started its activity aiming to reach those of the population who do not have bank accounts and offer them access to financial support and banking services […]”[1].
As of 2015, VisionFund has a loan portfolio of USD 474.3 million outstanding to approximately one million borrowers in 32 countries. Per its 2013 report to the US-based Microfinance Information Exchange AgroInvest Serbia has a total loan portfolio of USD 13.2 million lent to approximately 16,000 active borrowers. The organization reported total assets of USD 16.7 million, return on assets of -9.43 percent and return on equity of -46.31 percent. AgroInvest Serbia does not take deposits.
EBRD began investing in Serbia in 2001. As of 2015, it has provided EUR 3.8 billion (USD 4.2 billion) for 188 projects in the financial, commercial, industrial and agricultural sectors as well as for infrastructure and energy projects in the country. EBRD invested EUR 8.9 billion (USD 10.1 billion) in 377 projects in 34 countries during 2014, and as of December of that year it reported total members’ equity of EUR 14.2 billion (USD 16.1 billion). As of 2015, Société Générale Serbia has a total loan portfolio of EUR 28 million (USD 30.9 million) and 26,000 clients. The organization reported total assets equivalent to USD 2 billion and it had 104 branches in Serbia as of December 31, 2014.
By Alíz Crowley, Research Associate
About European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central Asia and North Africa. 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). EBRD invested EUR 8.9 billion (USD 10.1 billion) in 377 projects in 34 countries during 2014, and as of December of that year it reported total members’ equity of EUR 14.2 billion (USD 16.1 billion).
About Société Générale
Société Générale is a financial institution that was established in 1864 and is based in Paris. Société Générale offers retail and private banking, corporate and investment banking, and investment management services in 76 countries. As of December 2014, Société Générale reported total assets equivalent to USD 715 billion. As of 2015, Société Générale Serbia has a total loan portfolio of EUR 28 million (USD 30.9 million) and 26,000 clients. The organization reported total assets equivalent to USD 2 billion and it had 104 branches in Serbia as of December 31, 2014.
About VisionFund International
VisionFund, a US-based nonprofit organization, offers financial services to families living in poverty in the developing world through a network of microfinance institutions in 32 countries in Asia, Africa, Latin America and the Caribbean, the Middle East and Eastern Europe. Its services include small loans and business training and support. VisionFund is part of US-based World Vision, a Christian relief, development and advocacy organization. As of 2015, VisionFund has a loan portfolio of USD 474.3 million outstanding to approximately one million borrowers.
Sources and Additional Resources
[1] European Bank for Reconstruction and Development (EBRD), EBRD and Societe Generale promote financial inclusion in Serbia
[2] European Bank for Reconstruction and Development (EBRD), Serbia Overview
MicroCapital, October 16, 2014, European Bank for Reconstruction (EBRD) Announces Potential $25m Risk-sharing Endeavor with Société Générale Serbia for Rural Microenterprise Financing Via VisionFund’s AgroInvest
MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)
MicroCapital Universe Profile: Société Générale
MicroCapital Universe Profile: Vision Fund International
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