July 27 (SeeNews) - The European Fund for Southeast Europe (EFSE) said on Thursday it has become the first international lender to provide a loan in Serbian dinars, after issuing 615 million dinars (5 million euro) to the country's Opportunity Bank (OBS) to support small businesses.
The local currency for the loan was provided to EFSE by the European Bank for Reconstruction and Development (EBRD) by way of dinar-denominated notes, EFSE said in a statement.
In December, the EBRD issued a three-year, 2.5 billion Serbian dinar bond, making the bank the first international organisation to issue debt paper in the country's currency.
The EFSE loan will allow OBS to offer local currency financing to borrowers in rural areas, such as small farmers, who have limited access to finance.
Dinar-denominated loans eliminate the risks associated with foreign-currency financing such as shifting exchange rates, EFSE explained.
OBS provides one-third of Serbia’s agricultural loans to small farmers, making it one of the leading lenders in this segment.
The European Fund for Southeast Europe (EFSE) was initiated by Germany's KfW development bank with the financial support of the German Federal Ministry for Economic Cooperation and Development and the European Commission.
(1 euro=120.286 dinars)