EBRD to offer $29m guarantee to CKB for MSMEs in Montenegro

The European Bank for Reconstruction and Development (EBRD) is set to offer €25m ($29m) in unfunded risk-sharing guarantee to Crnogorska komercijalna banka (CKB) to increase lending for micro, small and medium-sized enterprises (MSMEs) in Montenegro.

The initiative is supported by the European Union (EU), which is providing both technical support and a first-loss counter-guarantee via the European Fund for Sustainable Development Plus (EFSD+) programme.

It enables up to €50m in new SME lending through the EBRD’s portfolio risk-sharing (PRS) product, with the guarantee covering as much as 50% of the credit risk on loans issued by CKB.

EBRD Montenegro head Remon Zakaria said: “This collaboration with CKB, supported by the European Union, marks a significant milestone in our efforts to expand access to finance for underserved businesses in Montenegro.

“By sharing risk and combining innovative financial instruments with targeted technical assistance, we are enabling more SMEs to invest in growing their businesses.”

Under this arrangement, CKB will be able to lend using its own funds while the part of the risk will be shared through the EBRD and EU-backed structure.

The approach uses financial instruments intended to broaden options available to Montenegro’s private sector.

CKB management board chair Tamás Kamarási said: “Our collaboration with the EBRD and the EU represents a landmark achievement for CKB and Montenegro’s financial sector.

“By being the first bank in the country to introduce the portfolio risk-sharing instrument, we reaffirm our commitment to innovation and to empowering micro and small enterprises.”

EBRD has so far invested more than €1bn in Montenegro, backing activities tied to sustainable development, infrastructure, private sector progress and regional integration.

The new PRS facility marks the first time this product has been implemented by EBRD in Montenegro.

Last month, EBRD announced €20m in financing to NLB Banka Prishtina to create additional funding avenues for SMEs in Kosovo with a focus on supporting digital development priorities.

"EBRD to offer $29m guarantee to CKB for MSMEs in Montenegro" was originally created and published by Leasing Life, a GlobalData owned brand.

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