Microloans for entrepreneurs in Bosnia and Herzegovina

Đenita Jusić is the owner of a popular hair salon in Bugojno, Bosnia and Herzegovina.  Rahima Šabić, from Zenica, has a small company for making cakes called "Bueno kolači." Željko Škrbić, a farmer from Gradiska, raises pigs and grows vegetables for a living.

Although their products and services differ, these three entrepreneurs have something in common: they have all benefited from Mikrofin microloans to either expand or upgrade their business.

Since its founding in 1997 Mikrofin has been a regional leader in the field of microfinance, with branches all over Bosnia and Herzegovina. Over the years, Mikrofin disbursed around 400,000 micro and small loans to low-income customers and MSMEs.

Microfinance sector in Bosnia and Herzegovina serves around 170,000 clients, many of whom cannot enter the regular banking. Those clients are often not able to meet banking requirements and microcredit is practically the only source of financing available to them. Many of these microfinance sector clients are self-employed subsistence entrepreneurs.

In 2015, the CEB approved a € 2.5 million loan to Mikrofin for productive fixed assets acquisition and construction or extension of business premises, as well as for working capital.

“The loan will enable Mikrofin to provide hundreds of micro loans to non-bankable clients in Bosnia and Herzegovina and assist them in maintaining or improving its business and living standards of their families,” said Mladen Bosnic, the CEO of Mikrofin.

Given the importance of micro firms in the agricultural sector in Bosnia and Herzegovina and the sector’s importance for job creation, sub-projects in the agriculture sector are also eligible, up to a maximum sum of € 5,000.

In the country with an official unemployment rate of almost 30%, hope for economic growth is centered on the micro and small business sectors that can find niche markets, move into import substitution segments, and take on new employees.

The aim of the CEB’s loan is to support the creation and preservation of income generating activities and self-employment, as well as the formation and development of micro-enterprises.