The European Bank for Reconstruction and Development (EBRD) announced, in a press release, a second loan of EUR 4 million (USD 5.9 million) to Kosovo Enterprise Programme (KEP), a leading microfinance institution (MFI) in Kosovo. The loan will help KEP finance loans to local micro, small and medium-sized enterprises (MSMEs) for launching new operations or expanding existing ones. In February 2007, MicroCapital reported on EBRD’s first loan to KEP, valued at EUR 3 million (USD 3.9 million).
The loan was extended as a part of EBRD’s EUR 75 million (USD 109.9 million) Micro, Small and Medium-Sized Enterprises Finance Framework for the Western Balkans and Croatia, which aims at broadening the outreach of financial institutions to small business clients, while strengthening financial intermediation and increasing competition. The loan will also be accompanied by a technical assistance program, funded by the US/EBRD SME Financing Facility. This two-part package will assist KEP’s transformation into a full commercial bank in 2008.
KEP was established in 1999 by the International Catholic Migration Commission (ICMC), a Geneva-based non-governmental organization (NGO). It is now the largest, financially self-sufficient MFI in Kosovo; it targets low and moderate-income entrepreneurs affected by the War, with a special focus on women and minorities. KEP also provides financial services for returning national and refugees. It reports an outstanding loan portfolio of EUR 26.2 million (USD 3.8 million) with a total of 30,406 clients served and 57,877 loans disbursed since its inception. According to MIX Market data as of year-end 2006, KEP has a debt-to-equity ratio of 69.2 percent, return on assets (ROA) of 7.1 percent, and return on equity (ROE) of 11.32 percent. KEP currently has 12,770 active clients.
Owned by 61 countries and two intergovernmental institutions, EBRD was founded in 1991 to support the private sector development in central Europe and central Asia, and is now the largest investor in the region. In 1999, it became one of the first international financial institutions to operate in Kosovo. The bank mobilizes significant foreign direct investment in addition to its own contributions for investment in private enterprises, among which SMEs are a crucial part. Since its inception, EBRD has committed more than EUR 947 million (USD 1.4 billion) to 122 financial institutions to support more than 3 million SMEs. The EBRD has been led by Jean Lemierre since July 2000.
By Mary Fu
Additional Resources:
European Bank for Reconstruction and Development (EBRD): “EBRD promotes microfinance in Kosovo”
Bloomberg: Currency Converter
MicroCapital article, February 21, 2007: “The European Bank of Reconstruction and Development (EBRD) Loans USD 3.9 million to Kosovo Enterprise Programme (KEP)”
EBRD: “MSME Financing Framework for Western Balkans & Croatia”
Kosovo Enterprise Programme (KEP): Home
MIX Market: Profile for KEP
EBRD: Jean Lemierre
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