Tuzla, Bosnia and Herzegovina, June 13, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, today signed an agreement to provide a 2 million euro loan to MI-BOSPO, a non-regulated, non-bank microcredit organization based in Tuzla, Bosnia and Herzegovina.
MI-BOSPO specializes in lending to low income women entrepreneurs. By providing the 2 million euro loan, IFC aims to support MI-BOSPO’s microfinance lending operations consisting of eight branch offices and seven satellite offices located throughout northeast Bosnia and Herzegovina. The proposed project will expand an existing financially successful micro lending program, targeting micro and small enterprises with little or no access to the formal financial system. Improved access to microfinance will help stabilize the economy, improve competition, restore economic growth, and achieve greater social equity.
Edward Nassim, IFC’s vice president of Europe, Africa, and the Middle East, said, “We expect the project to have a significant developmental impact on poverty alleviation by providing credit to an estimated 20,000 women microentrepreneurs over the next three years.”
MI-BOSPO’s loans range from $180 to $18,200, with an average tenor of 13.5 months and a maximum term of 36 months. The organization's strong performance, as demonstrated by its portfolio growth, profitability, and control mechanisms, will serve as a "best practice" example for other financial institutions throughout Southern and Eastern Europe.
Nassim added, “We hope that this is the start of a long-term strategic relationship with MI-BOSPO. In addition to the investment, IFC will be providing governance advice through its technical assistance facility for Southeast Europe, the Private Enterprise Partnership Southeast Europe.” Continuing, Mr Nassim noted that “MI-BOSPO is also expected to benefit from the research and information sharing of the Global Banking Alliance for Women (“GBA”), a consortium of financial institutions that has successfully targeted the women’s market.”
IFC’s Gender Entrepreneurship Markets (“GEM”) program hosts the secretariat of the GBA whose members gather research, as well as share information, strategies and best practices on the women’s market.
Nejira Nalic, MI-BOSPO’s Director, stressed the importance of microloans for human development. “Micro credit, microfinance, provides opportunity for low income people to continue running or to start up micro enterprises – for them to generate more income to improve their living standard. Many women affected by the war are often the sole income generator in the family in Bosnia and Herzegovina”.
About MI-BOSPO
The Founder, Bosnian Committee for Help (BOSPO, initiated by the Danish Refugee Council) started its microlending activities in March 1996 with the help of the World Bank. BOSPO's microcredit program was transformed into the Microcredit Organization MI-BOSPO in December 2000. The average disbursed loan amount is about KM 2,200 (less than €1,125, or US$1,300), which is among the lowest of all Bosnian MFIs. MI-BOSPO is an affiliate of Women’s World Banking and other local, state and regional microfinance networks.
About IFC
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
