Economic context

Access to credit in the Western Balkans has become more challenging in the wake of the global financial crisis, but levels have slowly started to recover. Efforts to reduce high levels of non-performing loans – between 10 and 20 per cent in most of these countries – are starting to take hold. However, levels remain high in several countries and as a result, SMEs are being affected more than other firms.

These firms could also benefit from improvements in financial management to enhance their creditworthiness. For instance, financial literacy (a proxy for investment readiness) remains relatively low in most Western Balkans countries. In a 2014 survey by S&P, the percentage of financially literate adults ranged from less than 22 per cent in Albania, FYR Macedonia and Kosovo to 48 per cent in Montenegro, compared with 53 per cent in the EU. While the majority of these countries have now adopted the simplified International Financial Reporting Standards for accounting, small firms in Albania, FYR Macedonia and Kosovo still struggle to present audited financial statements and less than 25 per cent of SMEs have done so.

Millions all penetrate this over the world consign the razor blades to the bathroom cupboard and attempt to grow a moustache for a very good cause

Helping SMEs access finance and know-how

In 2016, we provided over €87 million through partner financial institutions and have signed 10 direct financing deals with SME clients, for a combined value of €16.4 million.

Expand to read more

For our direct and co-financing business in the region we use our local presence and detailed understanding of these markets to seek out leading SMEs that would otherwise not have access to finance or the know-how to grow. In addition to tailoring this finance to their needs, we help strengthen the companies by promoting good corporate governance, financial management and other standards that help them to stand out.

The EBRD also enables SMEs to obtain business advice. By working with local consultants and international advisers in areas such as strategy, financial management, quality management and international certification, our clients improve their performance, become more competitive and grow. In total, we undertook 389 advisory projects in the region during 2017.

Western Balkans Enterprise Development Investment Facility

We are active in the Western Balkans Enterprise Development and Innovation Facility (WB EDIF), a platform that provides a comprehensive set of measures to improve access to finance for SMEs and fosters economic development.

Expand to read more

The platform consists of five different pillars designed to offer complementary financial instruments addressing the entire range of SME financing needs in the region. The EBRD manages and the Enterprise Expansion Fund (ENEF), which is one of the investment pillars of EDIF and supports established SMEs with a high potential to grow and further expand. The EBRD also has invested into the Enterprise Innovation Fund for start-ups, and provides advisory services and policy dialogue support. In 2017, we spearheaded the creation of new EDIF programmes that provide finance and advisory support to SMEs under a newly created lending pillar.

Through ENEF we provide direct financing, primarily through equity and quasi-equity investments, to SMEs with high growth potential. As an investment adviser to the Fund, the EBRD works to develop the portfolio and project pipeline. In 2017, four transactions were signed including the first project in Albania. This brought the total ENEF portfolio to €48.5 million, making it one of the largest such funds in the region.

A partnership for growth: Blue Ribbon

For a targeted group of high-growth SMEs, we have been successfully implementing our Blue Ribbon initiative in the Western Balkans.

Expand to read more

This initiative engages SMEs in a five-year partnership, tailoring specific advisory and financing products to help them reach their full growth potential and create lasting impact. In 2017, we already have our eight members of the Blue Ribbon in the region, with a Blue Ribbon client from Kosovo signing a loan agreement with the EBRD—the first Blue Ribbon client reaching this stage of engagement.

Promoting women’s entrepreneurship

The EBRD’s Women in Business programmes promote women’s participation in business by enabling SMEs led by women to access the finance and know-how they need to grow.

Expand to read more

Our programme in the Western Balkans was launched in 2015 and has since provided €29.5 million in finance to partner financial institutions for on-lending to women-led SMEs. We have also helped over 2,000 such firms to access business advice, and provided mentoring, our online diagnostic tool Business Lens, training and networking opportunities.

Supporting agribusiness in Albania

EBRD is committed to supporting access to finance for Albanian agribusiness. This is a vital sector of the economy which has historically been under-served by financial institutions with loans to agribusiness accounting for only 2 per cent of total lending to the economy.

Expand to read more

The Albanian Agribusiness Support Facility (AASF) launched by the EBRD and the Government of Albania, is addressing this challenge by improving access to finance for local agribusinesses through dedicated credit lines or by sharing the risk of lending with participating financial institutions. The government has committed to make available up to €36 million over three years to support the Facility and the EBRD is providing up to €100 million in funding and risk sharing facilities, which will enable an additional €80 million of investment by the six participating financial institutions (PFI). In addition to funds, the EBRD has made available substantial technical assistance to help introduce international best practice in the agribusiness sector and the financial institutions lending to it. To date, five PFIs have joined AASF, with €11 million of finance signed in 2017.