Sarajevo, September 13, 2002
—The International Finance Corporation, the private sector development arm of the World Bank, will provide a Euros 3 million credit line to a Bosnian bank to increase the bank’s capacity to support micro and small businesses. The seven year credit line will help Sarajevo-based Micro Enterprise Bank (MEB) grow its operation and loan portfolio while extending credit to underserved small businesses.
Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia, said: “MEB has proven to be an efficient, well-managed provider of capital to small businesses in Bosnia-Herzegovina. This credit line will help create new opportunities for Bosnian small businesses. With its enhanced capacity from this credit line, I expect the bank continue to meet the critical need for small business credit.”
Micro Enterprise Bank was established with the help of IFC in 1997. The original sponsors of the project were BH Banka, Internationale Projekt Consult (IPC), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden nv (FMO), IFC and the European Bank for Reconstruction and Development. In July 1999, Kreditanstalt für Wiederaufbau (KfW) acquired BH Banka’s shares in MEB, further strengthening the Bank’s equity position.
As of December 31, 2001, approximately 94 percent of MEB’s disbursed loans were between US $1,500 and $15,000. MEB’s average loan size stands at $3,800 (approximately 4,300 Euros).
“As Bosnia-Herzegovina transitions to a market economy, small business growth will play a key role in their economic development,” Zamani noted. “Bosnia-Herzegovina needs strong, reliable banking institutions like Micro Enterprise Bank to meet the needs of small businesses.”
Significant support for the creation of MEB was provided by the government of Japan which provided $890,000 in financing for technical assistance to help found the innovative and self-sustainable microlending institution. The Japan Trust fund support proved particularly critical during the very early months of the Bank's operational phase, contributing substantially to the Bank's eventual growth.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
