First Employment and Social Innovation agreement in Montenegro

The European Investment Fund (EIF) and Crnogorska Komercijalna Banka AD (CKB) have signed the first transaction in Montenegro under the EU Programme for Employment and Social Innovation(EaSI).

The EaSI guarantee agreement with CKB will allow up to 700 Montenegrin micro-borrowers to benefit from EUR 5 million worth of financing over the next five years. Thanks to the joint backing of EIF and the European Commission, CKB will be able to reach out to micro-borrowers country-wide, including in rural and remote areas.

Commenting on the transaction, Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said: “Thanks to our EaSI guarantee, CKB will be able to provide loans at reduced interest rates to 700 micro-entrepreneurs who are excluded from commercial bank funding. The European Commission is fully committed to promoting inclusive entrepreneurship in the fight against social and financial exclusion. I therefore warmly welcome today's agreement with CKB, which marks the first of its kind in Montenegro under the EaSI programme.”

EIF Chief Executive, Pier Luigi Gilibert, said: “By giving the opportunity to financially excluded micro-borrowers to access additional financing solutions, EIF’s agreement with CKB is supporting the microcredit market in Montenegro. EIF is strongly committed to the creation of growth and jobs in European economies, and I am delighted that EIF is able to support Montenegro with this new microfinance agreement.”

Pal Kovacs, CEO of CKB, stated:The EaSI Agreement is the result of a recognised need to support micro clients who have not been in a position so far to further develop their own business due to a lack of access to financing. The product will take the form of an overdraft at the micro clients’ disposal up to EUR 10 000 covered by a personal guarantee. This agreement will give these clients the opportunity to closely cooperate with the bank which will recognise their needs, advise and support them in their business life cycle. CKB’s commitment to the community and development of microbusiness has once more been proved by signing this agreement and by continuing the successful and long-lasting cooperation with EIF.

This new agreement enables CKB to set up a new micro-credit product in form of an overdraft facility, which will allow disadvantaged micro-borrowers to withdraw additional funds. The micro-borrowers will not have to provide collateral requirements and will benefit from a reduction of the fees and the interest margin. Micro-enterprises wishing to benefit from the overdraft facility set up under EaSI can do so by contacting directly CKB.

About EaSI

The European Commission’s Programme for Employment and Social Innovation (EaSI) aims at supporting the EU's objective of high level employment, adequate social protection, fighting against social exclusion and poverty and improving working conditions.

The EaSI guarantee scheme was launched in June 2015 and is funded by the European Commission and managed by the European Investment Fund. It provides support to financial intermediaries that offer microloans to entrepreneurs or finance to social enterprises that would not have been able to gain finance otherwise due to risk considerations. The objective is to increase access to microfinance for vulnerable groups who want to set up or develop their business and micro-enterprises, through notably loans of up to EUR 25 000. In addition, for the first time, the European Commission is helping social enterprises through investments of up to EUR 500 000.

Recently, the European Commission has added the EaSI Capacity Building Investments Window in order to reinforce the capacity of selected financial intermediaries in the areas of microfinance and social enterprise finance. Through equity investments (such as seed financing, risk capital) mostly, EIF will support the development of these finance providers, for instance by opening a new branch, investing in human resources, developing a new IT tool or financing certain expenses. Ultimately, these investments will help increase the offer and opportunities for micro-borrowers and social enterprises.

Furthermore, the European Commission is reinforcing the social dimension of the European Fund for Strategic Investments (EFSI) for both microfinance and social entrepreneurship. Overall, the total amount of support to these areas is expected to increase (from EUR 193 million under the EaSI programme) to about EUR 1 billion, mobilising some EUR 3 billion in additional investment.

About EIF

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

More information on EU microfinance and social entrepreneurship support is available under:

EaSI Programme

EU support to social entrepreneurship

About CKB

Crnogorska Komercijalna Banka (CKB) is a member of OTP Group which is present in – apart Montenegro – eight other countries in South-Eastern Europe, serving altogether near 13 million of clients, in ca. 1 400 branches with 4 000 ATMs. Supporting SMEs with quality banking services and specialized products is one of the key strategic priorities of OTP Group, implemented by CKB in Montenegro.