BiH granted new loan for MSMEs’ recovery

BiH granted new loan for MSMEs’ recovery

BiH Finance Minister Vjekoslav Bevanda and World Bank (WB) Country Manager for Bosnia Emanuel Salinas signed on Monday in Sarajevo a loan contract worth €56 million. The WB has approved a loan to support small and medium-sized enterprises affected by the coronavirus pandemic.

As it was announced, the loan earmarked for a project to support the recovery of micro, small and medium-sized enterprises (MSME) and mitigate the effects of the coronavirus pandemic.

“60% of the loan or €33.6 million is intended for the BiH Federation entity and 40% or €22.4 million for the Republika Srpska entity. The loan terms are favourable, with a maturity of 15 years including a 5-year grace period,” Minister Bevanda explained.

The development banks in the two entities will secure support through special credit lines for companies affected by the crisis in the past year.

The entire BiH economy is faced with grave consequences in the wake of the pandemic, with the country recording a GDP nosedive.

According to the Statistical office, in the first half of 2020 GDP shrank by 3.7% YoY. Indicators for all of 2020 are still not available, however trends in the second half of the year came back even more unfavourable with the GDP fall projected even steeper.

At the same time, BiH has recorded a 17.5% drop in exports and a similar drop rate in imports.

Private consumption has fallen by 4%, however public spending has increased by 0.5%, which can be attributed to the higher costs of financing the health sector and the need to support the economy and bail it out during the first wave of the crisis. /ibna