Supporting jobs and economic and financial inclusion

As a result of this commitment, in 2023 the Bank financed over €200 million in loans to boost microfinance in six different countries as well as €580 million across six loans to help improve access to credit for MSMEs in four countries. Examples from the CEB’s project portfolio in North Macedonia and Hungary are detailed below, with further examples available in the Snapshots section towards the end of this report.

Support financial and social inclusion in North Macedonia through microcredit

North Macedonia is among the least developed CEB member states, with an unemployment rate in the double digits and one third of the population at risk of poverty or social exclusion. Women remain underrepresented in the labour market, particularly in rural areas. North Macedonia is also home to one of Europe’s largest communities, of ethnic Roma who often struggle to find formal work or create businesses.

The CEB’s €2 million loan to Horizonti Microcredit Foundation aims to support employment and job creation by enabling access to credit for microentrepreneurs and farmers, who are excluded from the mainstream banking system. In line with the Foundation’s mission of supporting financial inclusion of society’s most vulnerable groups, at least 20% of the loan proceeds are expected to be allocated to Roma microentrepreneurs, while around 80% of Horizonti’s borrowers are expected to be women. The new loan follows the successful implementation of a €1 million programme, approved in 2021, and reflects the CEB’s strategic commitment to strengthening resilience at local level.

Micro, small, and medium-sized enterprises (MSME), Job Protection and Climate Mitigation in Hungary

MSMEs form the cornerstone of the Hungarian economy, employing almost 70% of the total workforce, which is markedly higher than in many European countries. However, Hungary’s MSMEs face substantial financial hurdles, primarily due to high market interest rates, making borrowing prohibitively expensive for many. Moreover, global economic challenges, notably the energy crisis, have also affected the local economy, exerting further stress on both businesses and households.

In response to these challenges, the CEB has extended a €50 million loan to the Hungarian Development Bank (MFB) to partially finance its pilot Energy Efficiency Loan Programme. The initiative supports MSMEs in making eligible investments focused on renewable energy production and enhancing energy efficiency within their operations. This programme is not only pivotal in safeguarding existing and potential jobs, which are at risk due to the energy crisis and stringent funding conditions, but also reinforces the CEB’s commitment to sustainable development. The loan is a testament to the enduring partnership between the CEB and MFB, marked by ten preceding loans.

In 2023, the MFB loan was one of the two CEB-endorsed projects for Hungary. The second loan is also dedicated to bolstering MSMEs, with a particular focus on supporting export-oriented firms, including those led by women (see Snapshots).

©CEB 2024