The EBRD is lending Mikrokreditna Organizacija Partner, one of the largest microfinance institutions in Bosnia and Herzegovina (BiH), €8mn to enable owners of micro and small enterprises to gain more access to finance to start up or expand their businesses.

The loan, which will be used by Partner for on-lending to entrepreneurs, falls under the €75mn EBRD Micro, Small and Medium Sized Enterprises Finance Framework for the Western Balkans and Croatia, which aims to facilitate access to finance for smaller business clients.

Partner’s loan will be complemented by a €500,000 in technical assistance from donor countries under the EBRD Western Balkans Fund. This technical assistance will be used to facilitate the company’s current restructuring from a non-profit organisation into a commercial organisation, reflecting a new law on micro-credit organisations recently passed in BiH. The assistance will focus on strengthening internal audit/control processes, risk management, product diversification, development of financial and management policies and procedures and MSE lending-specific credit scoring processes.

Partner was established in April 1997 as a non-governmental organisation. In December 2000 it was registered as a microfinance institution licensed to provide financial support to micro entrepreneurs in BiH. Through its network of 43 offices, Partner serves more than 40,000 clients both in urban and rural areas.

Peter Reiniger, EBRD business group director for Central Europe, Western Balkans and Telecommunications, says Partner, with a portfolio of exclusively business clients, is playing a crucial role in supporting a vibrant and entrepreneurial micro and SME sector which in the long run should become the backbone of BiH’s economy.

Partner is an important institution that is assisting entrepreneurs across urban and rural Bosnia and Herzegovina with access to finance and the bank supports their plan to transform into a countrywide commercial microfinance company within the next two years, adds Reiniger.

Senad Sinanovic, Partner’s general manager, stresses that the EBRD loan supports the further development of Partner by strengthening its institutional capacity and financial potential. This will help Partner offer financial services to an increasing number of micro and small enterprises. It also supports the company’s transformation from a not-for-profit to a commercial organisation.

The board of governors, management and all Partner’s employees are certain that the business relationship between Partner and EBRD will enhance Partner’s competitive position in the BiH microfinance market.

This latest EBRD loan builds on the bank’s support for the micro enterprise sector in BiH. So far, the bank has extended loans to Mikrofin, EKI, and Sunrise. In addition, the EBRD-Italy Western Balkans Local Enterprise Facility allows the bank to contribute to the economic recovery of selected Western Balkan countries through the direct provision of mainly equity and quasi equity financing to small and medium local enterprises.

Across its countries of operations, the EBRD has committed over €835mn to 105 financial institutions to support more than 2mn small and micro enterprises.