EIB lends €20mn to Podgorička banka to serve Montenegrin SMEs affected due to Covid-19

The European Investment Bank (EIB) and Podgorička banka (Member of the OTP Group) have agreed on a €20 million credit line for Montenegrin small and medium-sized enterprises (SMEs) and mid-caps operating in some of the worst affected sectors of the economy, such as services and wholesale/retail trade.

The European Investment Bank (EIB) and Podgorička banka (Member of the OTP Group) have agreed on a €20 million credit line for Montenegrin small and medium-sized enterprises (SMEs) and mid-caps operating in some of the worst affected sectors of the economy, such as services and wholesale/retail trade. The credit line will enable Montenegrin SMEs to address liquidity constraints for short-term working capital needs, as well as longer-term investments, thereby contributing to faster economic and social recovery from the downturn caused by the COVID-19 pandemic. Support for private sector development will enhance the resilience of Montenegro's economy to external shocks and promote the retention and creation of jobs, especially for the country's youth. The loan forms part of Team Europe's COVID-19 response for the Western Balkans, and of the €3.3 billion EU package for the Western Balkans announced at the EU-Western Balkans Summit in Zagreb in May 2020. This is the third EIB loan to Montenegro under Team Europe's exceptional COVID-19 financial measures, bringing to €100 million the Bank's support to Montenegrin SMEs in 2020.

EIB Vice-President responsible for the Western Balkans, Lilyana Pavlova said: "Team Europe's support for the Montenegrin economy comes at a crucial time. Together with our partners in Podgorička banka, the OTP Group, and the European Union, the EIB continues to help local companies save jobs, grow and develop. Adequate support to the private sector is the only way we can ensure the sustainable, long-term development of Montenegro and of the Western Balkan region as a whole. With the credit line, we signed today, we are also reinforcing the Montenegrin banking sector and strengthening its ability to finance the economic recovery. The EIB looks forward to continuing to work alongside Montenegrin banks as a trustworthy and reliable partner even in the most difficult of times."

Pál Kovács, CEO of CKB, with which Podgorička banka will be merged in a few days, said:

"The crisis caused by the pandemic has affected almost all industries of the economy, not only in Montenegro but worldwide. Timely measures are now important, and we are pleased that this credit line with the EIB will provide support to Montenegrin SMEs and mid-caps in the most affected sectors of the economy and help them to overcome the consequences of the pandemic for their liquidity while supporting their new investment cycle. Small and medium enterprises are the basis of modern economies and our bank will be there to support every sound and justified project in Montenegro." Oana-Cristina Popa, EU Ambassador and Head of EU Delegation to Montenegro, said: "Throughout this challenging year, the European Union has shown that it stood by Montenegro. While our emergency response to the COVID-19 crisis focused primarily on helping the Montenegrin health sector, today and over the next year, our priority will be to assist the private sector and help to save jobs. It is great news that the EIB is launching an additional support package for small businesses in Montenegro, as part of the European Union's overall relief effort. We hope that the assistance will reach those in need and will lay the groundwork for a quicker recovery of the Montenegrin economy."