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Thursday,
10.04.2025.|
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Copy linkEBRD and EU launching new form of SME financing in Western Balkans
The European Bank for Reconstruction and Development (EBRD) has announced that small and medium-sized enterprises (SMEs) in the Western Balkans will be able to use a new type of financing through the "Go Digital in the Western Balkans" program. That program combines loans, incentive grants and technical assistance for investments in digitization, automation and green technologies.
The aim of the program launched by the EBRD, with the support of the European Union (EU), is to encourage innovation, competitiveness and sustainable growth in the private sector of the Western Balkans. As part of the program, the EBRD will place up to EUR 350 million to partner financial institutions in the Western Balkans region for further lending to small and medium-sized enterprises. Enterprises will also be able to exercise the right to grants in the amount of 10% of the amount of loans financed by the EU.
In total, the EU is providing EUR 27.6 million in incentive grants and technical assistance for the program, secured through the Western Balkans Investment Framework (WBIF). EBRD Managing Director, Head of Financial Institutions Business Group, Francis Malige, said that the "Go Digital in the Western Balkans" program aims to significantly improve the level of digitization of small and medium-sized enterprises, empowering them to become more innovative, productive and competitive at the global level.
– The program will address lags in the adoption of digital technologies by small and medium-sized enterprises across the region. Together with our partners from financial institutions and with donors, we are achieving a systemic impact in the region by strengthening innovation in the sector of small and medium enterprises in order to build competitive and robust economies for the future – he said.
Since 2009, the EU has channeled EUR 628 million through the WBIF to support the growth of the private sector in the Western Balkans, through grants, guarantees and combined financing, helping to build more innovative and business-friendly ecosystems, the statement says. It is stated that the EBRD is a key institutional investor in the Western Balkans region with more than EUR 20 billion invested to date since it started working in the region in the mid-nineties. It is also pointed out that the private sector, and especially small and medium-sized enterprises, remain among the key areas of EBRD investment.
Small and medium-sized enterprises make up 99% of all enterprises in the Western Balkans and play a key role in meeting the goals of the digital and green transition, emphasizing the need for sustainable business practices. Automation and digitization boost productivity, and companies that adopt these technologies achieve an increase in efficiency of up to 20%. However, as stated, many small and medium-sized enterprises in the Western Balkans struggle with the adoption of digital technologies and transformation, so the level of digitalization is 20% points lower compared to small and medium-sized enterprises from the EU, and only a fifth of small and medium-sized enterprises sell online, while less than 10% use more innovative digital solutions such as cloud computing, bid data and AI.
It is indicated that, as SMEs struggle to secure adequate funds for digitalization, there is still significant untapped potential for businesses to invest in ICT to simplify operations, automate processes, increase efficiencies, increase sales, improve user experience and increase market access, all of which are drivers of competitiveness.
The EBRD stated that the new program sought to address these shortcomings by improving both digital awareness and access to finance. SMEs will be able to apply for funding for a wide range of technology and investment solutions, from the simple adoption of automated and robotic industrial solutions to complex digital decision-making tools and data collection and analysis tools, thus contributing to decarbonization and resource efficiency.
The credit line will be available in more than 10 financial institutions with which the EBRD will partner, including banks and leasing companies in the region.
The aim of the program launched by the EBRD, with the support of the European Union (EU), is to encourage innovation, competitiveness and sustainable growth in the private sector of the Western Balkans. As part of the program, the EBRD will place up to EUR 350 million to partner financial institutions in the Western Balkans region for further lending to small and medium-sized enterprises. Enterprises will also be able to exercise the right to grants in the amount of 10% of the amount of loans financed by the EU.
In total, the EU is providing EUR 27.6 million in incentive grants and technical assistance for the program, secured through the Western Balkans Investment Framework (WBIF). EBRD Managing Director, Head of Financial Institutions Business Group, Francis Malige, said that the "Go Digital in the Western Balkans" program aims to significantly improve the level of digitization of small and medium-sized enterprises, empowering them to become more innovative, productive and competitive at the global level.
– The program will address lags in the adoption of digital technologies by small and medium-sized enterprises across the region. Together with our partners from financial institutions and with donors, we are achieving a systemic impact in the region by strengthening innovation in the sector of small and medium enterprises in order to build competitive and robust economies for the future – he said.
Since 2009, the EU has channeled EUR 628 million through the WBIF to support the growth of the private sector in the Western Balkans, through grants, guarantees and combined financing, helping to build more innovative and business-friendly ecosystems, the statement says. It is stated that the EBRD is a key institutional investor in the Western Balkans region with more than EUR 20 billion invested to date since it started working in the region in the mid-nineties. It is also pointed out that the private sector, and especially small and medium-sized enterprises, remain among the key areas of EBRD investment.
Small and medium-sized enterprises make up 99% of all enterprises in the Western Balkans and play a key role in meeting the goals of the digital and green transition, emphasizing the need for sustainable business practices. Automation and digitization boost productivity, and companies that adopt these technologies achieve an increase in efficiency of up to 20%. However, as stated, many small and medium-sized enterprises in the Western Balkans struggle with the adoption of digital technologies and transformation, so the level of digitalization is 20% points lower compared to small and medium-sized enterprises from the EU, and only a fifth of small and medium-sized enterprises sell online, while less than 10% use more innovative digital solutions such as cloud computing, bid data and AI.
It is indicated that, as SMEs struggle to secure adequate funds for digitalization, there is still significant untapped potential for businesses to invest in ICT to simplify operations, automate processes, increase efficiencies, increase sales, improve user experience and increase market access, all of which are drivers of competitiveness.
The EBRD stated that the new program sought to address these shortcomings by improving both digital awareness and access to finance. SMEs will be able to apply for funding for a wide range of technology and investment solutions, from the simple adoption of automated and robotic industrial solutions to complex digital decision-making tools and data collection and analysis tools, thus contributing to decarbonization and resource efficiency.
The credit line will be available in more than 10 financial institutions with which the EBRD will partner, including banks and leasing companies in the region.
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