Sarajevo, Bosnia and Herzegovina, October 5, 2022 – USAID Developing Sustainable Tourism in Bosnia and Herzegovina (Turizam) and ProCredit Bank BiH have formalized their partnership through the signing of a Joint Implementation Plan in Sarajevo today. The objective of this plan is to facilitate different aspects of cooperation between banks and the tourism sector through the development of sustainable tourism businesses. Amir Salkanović, the President of the ProCredit Bank Management Board, and Ibrahim Osta, Chief of Party, USAID Developing Sustainable Tourism in Bosnia and Herzegovina, signed this agreement.
This Plan ensures a facilitated approach to small and medium-sized enterprises in the tourism sector of Bosnia and Herzegovina, enabling continuing investment in the development of tourism products and the enhancement of local tourism offerings. Creating new alternatives for corporate financing in tourism is a crucial step that will encourage investments, optimize seasonal changes in market dynamics, and pave the way for tourism to contribute more significantly to the economic growth of BiH.
“We are aware that the tourism sector is frequently perceived as a sector with seasonal problems and hence perceived as a high-risk sector for lending. By signing this Joint Implementation Plan today, we have taken a significant step toward creating new investment opportunities in the tourism sector and demonstrating our interest and commitment to play a key role in fueling the growth of the sector. In addition, we confirmed that the concept of sustainable tourism is an important economic factor for Bosnia and Herzegovina’s overall economic growth”, emphasized Amir Salkanović, the President of the ProCredit Bank Management Board.
Despite the difficulties posed by the post-pandemic recovery, the tourism sector in Bosnia and Herzegovina continues to grow. In fact, the industry has bounced back which is a sign of the vibrancy of Bosnia and Herzegovina and its attractiveness as a tourism destination. The industry is poised for further growth, calling for increased investment in infrastructure, new visitor experiences and better attractions. USAID Turizam is also working with both Entities (FBiH and RS) on upgrading the hostel classification system, which would guide the accommodation sector, the largest investment segment of the industry, in upgrading quality and offers a roadmap to attaining internationally recognized standards of quality, requiring further investments to upgrade or expand capacities, thus requiring more finance.
However, the majority of tourism-related businesses lack adequate avenues to access credit due to various factors, including inability to present bankable applications, limited financial literacy or issues with presenting sufficient physical collateral. This partnership demonstrates to the tourism sector that all recognize it is an area of growth and they will be taken seriously when applying. USAID Turizam is also expressing its readiness to provide advice on how best to approach the bank for borrowing and how to present their business ideas in a bankable manner.
“This collaboration between USAID Turizam and Pro Credit will lead to direct support not only to the tourism sector but also to the other related sectors in making their business activities more financially resilient and sustainable, and lead to increasing job opportunities for the people of Bosnia and Herzegovina. USAID Turizam has identified the demands and obstacles to which the tourism sector was exposed during the pandemic and has identified investment and growth areas that require increased finance.”, concluded Karl Wurster, Ph.D., Economic Development Office Director USAID/Bosnia and Herzegovina (USAID BiH).
The tourism value chain is of multifaceted importance to the BiH economy, and financial institutions play a crucial role in establishing new and sustainable financial lines. Investments in the tourism sector and related activities will accelerate the economic growth of Bosnia and Herzegovina and enhance its international competitiveness. According to Turizam, the tourism value chain is connected to various industries such as environmental conservation, food and hygienic products suppliers, communication, transport, construction, transport, and furniture. All these sectors depend to various degrees on tourism and their growth is impacted by tourism success.