The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide a €10mn (US$12.3mn) credit line to Nova Banka, a commercial bank in Bosnia and Herzegovina, for lending to small and medium enterprises and home buyers.

Through the credit line, IFC will support Nova Banka’s strategy to grow its business through on-lending to smaller enterprises and to the consumer retail housing sector. The line will enable Nova Banka to meet the needs of companies and consumers for long-term financing.

Jyrki Koskelo, IFC’s director for global financial markets, says, “IFC financing will help Nova Banka expand its ability to offer longer-term loans, scale up its operations in the Republic of Srpska, and broaden its service delivery in Bosnia and Herzegovina, strengthening its reputation in the local market”.

IFC’s investment is in line with its strategy of helping banks and other local financial intermediaries develop small and medium enterprise lending and housing finance operations in Bosnia and Herzegovina. Smaller businesses, which account for 60% of the country’s industrial output, are important sources of jobs and economic activity, and home ownership can be a vital source of collateral for low and middle-income families.

IFC also is considering implementing a technical assistance programme in the areas such as risk management and treasury operations for better service delivery to Nova Banka’s retail and corporate clients.