Sarajevo, October 2, 2019 – To increase access to finance for
small-and-medium size businesses in BiH, the Embassy of Sweden
(Sida), the US
Agency for International Development (USAID), and ProCredit Bank in BiH signed a Guarantee Agreement
today that has a cumulative disbursement amount of $19 million over the next
seven years.
This mutual Loan Portfolio Guarantee will allow
qualifying borrowers in the manufacturing sector – including information
communication technology, tourism, agriculture, wood and metal processing,
automotive parts, and renewable energy – easier access to fresh money needed
for business development. This new
cooperation among two leading donors in BiH and the bank actually means that
qualified entrepreneurs in these promising sectors will get financial loans
with Sida and USAID guarantees.
The
Second secretary at the Embassy of Sweden, Emil Wannheden states that
“ProCredit Bank, USAID and Sida have common understandings and a shared
commitment to important policy objectives. One of these is the commitment
to the development of a ‘green’ portfolio of loans to SMEs in BiH for expansion
and modernization investments related to energy efficiency measures or
renewable energy installations. The critical assumption for the
success of the guarantee remains that there is a demand for bankable, good
quality, long term investment loans by the BiH SMEs, particularly within the
area of investment for improved energy efficiency. “
The USAID Mission Director, Nancy Eslick,
states that “lack of access to finance is one of the major obstacles to
business growth in BiH, especially for start-ups and young businesses that do
not have a credit history.” USAID values
its longstanding partnership with Sida and ProCredit Bank in addressing this
economic growth challenge. We have had
successful loan portfolio guarantees in the past with impressive utilization
rates and very few non-performing loans.
As a result of our joint effort, SME borrowers will have available
financing to grow their business and add more jobs, providing a demonstration
effect to local banks for the viability of lending to the SME sector,
emphasized Eslick.
ProCredit Management Board member, Amir
Salkanović, states that this Agreement is actually an extension of the
cooperation between USAID, Sida and ProCredit Bank in financing and supporting
SME sector in BiH. “Our cooperation is yielding great results for the small and
medium businesses that have already benefited from these contracts. More than
50 companies were already financed with over 30m BAM guarantee backed loans. We
are delighted to see more innovative and environmentally friendly SMEs
developing and growing their businesses and adding more jobs by utilizing newly
approved line,” Salkanovic said.
Sweden/Sida and USAID have been cooperating on
a guarantee scheme for private and financial sector development since
2010. The choice of the instrument of guarantees as way to facilitate and
induce banks to lending in priority sectors remains relevant today as entering
into a new guarantee agreement with ProCredit Bank.