The FINANCIAL — The EBRD and Raiffeisen International, one of the leading banking groups in central and eastern Europe (CEE), are teaming up to provide loans for Ukraine and Bosnia and Herzegovina (BiH), focusing on small and medium-sized enterprises (SMEs) and the residential mortgage and small business industrial leasing sectors.
Raiffeisen Bank Aval, the second largest bank in Ukraine, will receive a $50 million (€32 million equivalent) mortgage loan to finance residential mortgage loans in Ukraine. The mortgage loan will provide long-term financing to Raiffeisen Bank Aval for on-lending to individuals for purchasing, building, renovating, repairing and re-mortgaging residential property in Ukraine. An additional €300,000 in technical cooperation funds for implementation and administrative capacity building will be provided by the Canadian International Development Agency.
Raiffeisen Bank Bosnia and Herzegovina (RBBH), one of the leading banks in BiH, will receive €30 million to continue to focus on SMEs located across the country, taking advantage of its sizeable regional network and to increase the availability of SME financing with longer maturities.
Raiffeisen Leasing Bosnia and Herzegovina (RLBH), the second largest leasing company in BiH, will receive €10 million to continue to finance leases for small and medium-sized enterprises across BiH in amounts of up to €125,000. The loan will provide RLBH with the necessary financial support to increase the availability of lease financing at longer maturities for the purchase of fixed assets by Bosnian SMEs. This, in turn, will contribute towards promoting competition in the sector.
The loans to RBBH and RLBH mark the launch of the extended and expanded EBRD Western Balkans and Croatia Financing Framework, a €250 million multi-client, multi-product framework aimed at providing partner financial institutions in the region with a full range of financial products, including micro and SME credit lines, mortgage financing, consumer finance, leasing finance, guarantee facilities, syndicated loans, subordinated debt and equity investments.
Kurt Geiger, EBRD Business Group Director for Financial Institutions, said Raiffeisen International is an important partner for the EBRD in reaching out to private-sector business and increasing access to finance for large areas in the region where access to finance remains limited. In these uncertain times of global financial market conditions, such loans will help fill the gaps for medium and long-term financing to the real economies of the region. Banks like Raiffeisen are vehicles which enable us to reach together into the entrepreneurial heart of our region, helping to create jobs and boost economic growth, he added.
Herbert Stepic, CEO of Raiffeisen International, highlighted the history of fruitful co-operation between the EBRD and Raiffeisen. "It is of utmost importance that the EBRD provides financing to the backbone of developing economies, helping entrepreneurs to grow their business and providing individuals with more access to financing for mortgages. Due to our strong position in the region, Raiffeisen is an ideal partner to distribute these funds", said Mr Stepic.
The EBRD is the largest investor in Central and Eastern Europe and the Commonwealth of Independent States, having invested more than €36 billion for a total value of projects of more than €116 billion.
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