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Access to Finance

Bank Capacity Building and Microfinance



The challenge:

Limited access to finance remains one of the main development constraints in transition economies of Southern Europe, especially for micro, small and medium sized enterprises (MSMEs). There is an evident need to enhance lending capabilities of banks and non-bank financial institutions in the region.

The IFC approach:

IFC's Bank Capacity Building and Microfinance Program in Southern Europe is:

  • Working at the regulatory level on specific issues to further develop and create the framework and conditions for sustainable development of financial markets
  • Supporting the development of microfinance institutions in particular in corporate governance, business strategy, risk management, financial management, and internal audit and control.
  • Supporting individual banks through institution building, in particular in the areas of Governance, Strategy and SME Focus, Market, Products and Services, Sales Culture and Distribution Channels, Credit Risk Management, and IT and MIS.
Implementing partners:

Banks, professional associations, central banks, securities commissions and relevant line ministries.
IFC is currently implementing capacity building projects for MI-BOSPO and Nova Banka (Bosnia and Herzegovina).


Housing Finance



The challenge:

Although it is rapidly growing in Southern Europe, the housing finance market in the region is still a fraction of that in comparable economies. Financial institutions often do not have sufficient experience in carrying out mortgage-related lending operations, with differing industry standards and practices exacerbating the difficulties. Potential borrowers, similarly, are unaware or misinformed of the mortgage opportunities.

The IFC approach:

IFC's Housing Finance Program in Southern Europe is:
  • Combining support to the housing finance activities of lending institutions and assists with improvements at the regulatory level
  • Implementing a pilot project in Albania for the development of the housing finance market, entailing detailed research, due diligence, training of banks and a household baseline survey.
Implementing partners:

Companies, banks, professional associations, relevant line ministries.
IFC is currently implementing a capacity building project in housing finance for BKT (Albania and collaborating with the Directorate of Housing of the Government of Albania on regulatory improvements.


Sustainable Finance



The challenge:

In Southern Europe, the amount of energy used per unit GDP is 2-4 times that used in modern industrialized economies. Fuel and electricity prices are rising, and distribution networks that are old and under-capacity are creaking with the strain of economic development. In a world where climate change is increasingly at the forefront of many peoples' minds, the challenge in these transition economies of Southern Europe is to ensure that new investments in industry, residential accommodation, commercial and public buildings use the most energy efficient technologies that are economically viable.

The IFC approach:

IFC's Sustainable Finance Program in Southern Europe is:
  • Assisting companies in Albania, Bosnia and Herzegovina, FYR Macedonia, Montenegro and Serbia to identify investment opportunities for energy efficiency.
  • Assisting banks in to lend to companies for energy efficiency investments.
  • Assisting banks and municipalities to identify and implement possibilities of energy efficient investment, in particular in such areas as heating and energy supply in public institutions.
Implementing partners:

Companies, banks and municipalities.
IFC is currently implementing energy efficiency projects with EKI (Bosnia and Herzegovina), ProCredit (Serbia) and EFSE (Balkans).

Donor:

The Access to Finance programs are currently financed by IFC. Further funding is being sought to expand the activities.


Energy Efficiency Finance





Bosnia and Herzegovina has a significant small hydro potential and a strong pipeline of concessions which were already awarded or are about to be awarded. Unfortunately, due to lack of information, knowledge and investment capabilities of concession owners most projects are still undeveloped. For small number of developed projects, lack of equity for small and medium sized project developers has been identified as a key obstacle to investment in small and medium sized renewable energy opportunities. In order to support project pipeline development IFC organized two workshops:

Small Hydro Power Plants in the Federation of Bosnia and Herzegovina, March 04 2009, Sarajevo.
Small Hydro Power Plants in the Republika Srpska, March 11 2009, Banja Luka.

 
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