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Dec 18, 2007 15:30 EEST
December 18 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) is lending 4.0 million euro ($5.8 million) to help micro and small enterprises (MSEs) in Bosnia to gain wider access to finance to start up or expand their businesses, the bank said on Tuesday.
The bank has lent the money to one of Bosnia's most successful non-bank microfinance institutions, Prizma, which will on-lend it to entrepreneurs, the EBRD said in a statement.
The loan falls under EBRD's 75 million euro Micro, Small and Medium Sized Enterprises Finance Framework for the Western Balkans and Croatia, which aims at facilitating access to finance for smaller business clients.
Prizma's loan will be complemented by up to 400,000 euro in technical assistance from donor countries. The aid will focus on strengthening internal audit and control processes, risk management, product diversification, development of financial and management policies and procedures and MSE lending-specific credit scoring processes, the statement said.
”A new microfinance law came to force in Bosnia in August 2007, as a result of which microfinance institutions now come under the umbrella of banking supervision. This change in the legislation is instrumental in attracting international commercial investors in the microfinance sector in Bosnia,” the statement said.
Prizma was established in April 1997 as a non-governmental organisation. In September 2001 it was registered as a microfinance institution licensed to provide financial support to micro entrepreneurs in Bosnia. Through its network of 41 offices, Prizma serves more than 30,000 clients both in urban and rural areas.
So far, the EBRD has extended loans to five other Bosnian microfinance organisations - Mikrofin, EKI, Sunrise, Partner and MI-BOSPO. Across its countries of operation, the bank has committed over 947 million euro to 122 financial institutions to support more than three million small and micro enterprises.
($ = 0.6942 euro)
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