The CEB and Hypo Alpe Adria BiH Group cooperate to provide 100 million Euro finance package for the SME sector in Bosnia and Herzegovina
18 June 2008
The CEB and Hypo Alpe Adria BiH Group today signed three loan agreements in total amount of 50 million Euros which will provide medium and long terms funds for investments in the SME sector. The loans, with tenors up to twelve years, will be granted to Hypo Alpe Adria Bank Mostar, Hypo Alpe Adria Bank Banja Luka, and Hypo Alpe Adria Leasing Sarajevo.
The funds will be on-lent to micro, small and medium size enterprises throughout the country, giving them access to long terms funds that are in short supply in the local capital markets. It will allow small businesses that employ less than 250 staff to acquire machinery, expand capacity, improve product line and undertake other investments that create new and maintain existing jobs.
Since the CEB only finances 50% of each investment sub-project, and the balance of the cost of sub-projects will be financed by the Hypo Alpe Adria Group and other sources, the total benefit for the BiH economy will amount to at least 100 million Euros, slightly more than 1% of annual GDP.
Imre Tarafás, Vice-Governor of the CEB, said: “BiH suffers from the highest unemployment rate in Europe and one of the highest in the world. We are pleased to be able to work with the Hypo Alpe Adria Group in BiH and other partner banks by providing scarce long term funds that businesses need to create jobs. With partners like Hypo Alpe Adria Group we hope to be able to help in reducing the unemployment rate and accelerating economic expansion in the country that has paid a very heavy price of war, and economic and political transition.”