Serbia’s AikBank has secured a €30mn-equivalent revolving factoring credit facility from the European Bank for Reconstruction and Development (EBRD), the first local currency trade transaction the development bank has supported in the country.
The funds are being disbursed in Serbian dinars through a digital factoring platform recently launched by AikBank, the EBRD said in a statement.
It added that Belgrade-headquartered AikBank has already allocated the €30mn value due to the strong demand for local currency trade finance solutions in Serbia.
Local currency lending eliminates foreign exchange risk for businesses that primarily trade in dinars, according to the bank.
“The facility is expected to play an important role in supporting Serbian businesses, particularly small and medium-sized enterprises, by improving access to working capital and strengthening liquidity throughout domestic supply chains,” the EBRD said.
“By combining local currency funding, digital delivery channels and increased access to factoring finance, the facility is expected to contribute to the growth, competitiveness and resilience of the country’s private sector.”
Local currency financing is a “major focus” for the London-headquartered development lender’s trade facilitation programme, its head Shona Tatchell has said. The bank has local currency factoring products in five countries.
