The European Investment Bank (EIB) has been instrumental in supporting lending to small and medium enterprises (SMEs) in the region, according to report “The impact of the EIB’s intermediated lending to businesses in the Western Balkans”published today. SMEs benefiting from EIB loans reported a 15% increase in employment growth, surpassing similar firms that did not receive them. This impact corresponds to approximately 15 additional jobs for every €1 million of EIB loans issued. On top of that, firms with EIB financing experienced a 20% rise in total assets and a remarkable 35% increase in fixed assets compared to those without, demonstrating importance of increased access to finance under favourable market conditions to credit-constrained SMEs.
The study indicates that the positive effects of EIB intermediated lending on employment were more pronounced for firms with no previous access to finance. The report assesses the impact to SMEs in Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia between 2009 and 2023. Over that period, the bank has financed loans on favourable terms to 28 400 companies.
Speaking about the report, EIB Vice-President Kyriacos Kakouris stated, “EIB intermediated lending plays a crucial role in fostering SME growth and economic development in the Western Balkans. The positive impact on employment and investment further underscores the importance of the EIB support in addressing financing gaps and driving sustainable economic growth in the region. We are committed to continuing our support to the private sector in the region.”
As highlighted by Chief Economist of the EIB Debora Revoltella, “This study demonstrates the positive effects of EIB financing in empowering businesses to invest, expand and contribute to the long-term development of the region. It also highlights Bank’s crucial role in promoting financial inclusion by granting SMEs first-time access to bank lending finance.”
For more information about the study, consult the publication here.
