European Bank For Reconstruction And Development And European Union Launch €20M Guarantee To Boost MSME Lending In Bosnia And Herzegovina

The European Bank for Reconstruction and Development and the European Union are working together to improve access to finance for micro, small, and medium-sized enterprises (MSMEs) in Bosnia and Herzegovina. Their latest initiative involves supporting a new risk-sharing financing facility in partnership with ProCredit Bank d.d., aimed at increasing lending to businesses that often struggle to secure funding. Under this arrangement, the EBRD is offering an unfunded portfolio guarantee of up to €20 million. This guarantee will cover 50 percent of the credit risk on a newly created MSME loan portfolio that could reach up to €40 million.

By sharing the financial risk, the facility enables ProCredit Bank to expand its lending activities, particularly to underserved groups such as very small businesses, companies located outside major cities, and enterprises led by women and young entrepreneurs. The initiative is further supported by the EU through first-loss risk coverage provided under the European Fund for Sustainable Development Plus. This backing helps reduce the overall risk for lenders and encourages additional private-sector investment. As a result, more capital can flow into the economy, especially to businesses that typically face difficulties in accessing credit.

A key component of this program is its focus on sustainability. At least 25 percent of the financing supported by the EBRD will be directed toward green projects that meet the Bank’s Green Economy Transition standards. This ensures that the facility not only improves access to finance but also contributes to environmental goals and supports the country’s shift toward a more sustainable economy.

Stela Melnic highlighted the importance of MSMEs, noting that they play a central role in the country’s economy but often face challenges when seeking funding. She explained that this partnership will help unlock new lending opportunities, supporting businesses that contribute to job creation, innovation, and economic resilience, while also promoting greener and more inclusive growth.

From the banking perspective, Amir Salkanović emphasized that access to finance remains uneven across Bosnia and Herzegovina, particularly for smaller businesses and those in early development stages. He noted that this risk-sharing model allows the bank to deliberately extend its reach into these segments and provide financial support where it is most needed, while continuing to focus on sustainable, real-sector investments. ProCredit Bank d.d. Bosnia and Herzegovina has been a long-standing partner of the EBRD and is recognized as a key lender to MSMEs in the country. The bank is known for its commitment to responsible banking and sustainable development.

By reducing the financial risk and freeing up capital, this new facility will allow the bank to channel more resources into productive sectors and support businesses that face structural barriers to financing. The EBRD has been actively involved in Bosnia and Herzegovina for many years, playing a significant role in supporting private-sector growth, strengthening financial systems, and promoting environmental sustainability. Since it began operations in the country, the organization has invested more than €3.4 billion across 265 projects, contributing to infrastructure development, economic stability, and long-term resilience.