The EBRD is lending TTK Bank AD Skopje, a medium-sized bank in FYR Macedonia, €5mn to finance more small and medium-sized enterprises across the country.

One of the biggest constraints for SMEs in FYR Macedonia and other central and eastern European countries is the lack of access to longer-term financing. The loan will help overcome that obstacle by enabling TTK to on-lend up to €125,000 to entrepreneurs wishing to create or expand existing businesses.

Jean-Marc Peterschmitt, EBRD director for bank relationships, says the loan is important for helping develop the banking sector in FYR Macedonia, and at the same time help finance more SMEs to strengthen the private sector, and promote economic growth in the country.

The loan falls under the Western Balkans SME Finance Facility, a €50mn framework approved by the EBRD to finance local SMEs in Albania, Bosnia and Herzegovina, FYR Macedonia, Kosovo, Serbia and Montenegro. The Italian government will provide technical cooperation funds to help finance a team of consultants, which will train TTK’s employees in up-to date SME lending technologies.

The Italian government is strongly committed to supporting economic growth in the western Balkans, in particular in FYR Macedonia, and the EBRD, with its expertise of the region and the tools it uses for providing finance, is an ideal partner in supporting that process, said Roberto Rizzo, charge d”affaires at the Italian embassy in FYR Macedonia.

Established in July 2006 following the merger of two smaller banks – Teteks-Kreditna Banka AD Skopje, and Tetovska Banka AD Tetovo – TTK is based in FYR Macedonia’s capital city Skopje. While the bank operates in six locations in Skopje and 16 in another 11 cities throughout the country, the Tetovo region in North West of FYR Macedonia remains TTK’s stronghold. The bank’s largest shareholder is Teteks, a textile firm from Tetovo.

Earlier this year, the EBRD acquired 25% in TTK to support its restructuring and growth plans. Part of the restructuring process includes the implementation of an Institutional Building Plan (IBP) that will help develop TTK into a modern, efficient institution. The IBP will particularly help raise corporate governance standards to international levels and strengthen control processes and risk management procedures. The IBP will be financed through technical cooperation funds from the Norwegian ministry of foreign affairs.

Atanas Spiroski, first general manager of TTK Bank says that following the signing of the subscription and the shareholders “agreements for the EBRD equity investment in TTK, the management is very happy to continue the cooperation with EBRD by signing of the loan agreement. The SME loan will help TTK to support the SME sector in Macedonia, which is a vital part of our strategy, Spiroski adds.

The EBRD is one of the largest investors in FYR Macedonia, having committed more than €409mn in 26 projects.