EBRD, EU expand Montenegro small business financing through Alter Modus

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Montenegro SME financing expands

Highlights

The EBRD and EU are providing Alter Modus with a financing package consisting of a 7 million euro MSME loan, 2 million euro for women-led businesses, and 1 million euro for youth entrepreneurs.
At least 20 per cent of the 7 million euro MSME loan will target green investments, supporting energy and resource efficiency improvements for private enterprises across Montenegro.
The European Fund for Sustainable Development Plus, Luxembourg, and Italy back the women and youth financing, offering risk cover and technical assistance to facilitate lending to underrepresented business groups.

Financing package targets wider business access

As reported by EBRD, announcing, the financing package for Alter Modus consists of a 7 million euro loan for MSMEs, a 2 million euro loan under the Western Balkans Women in Business programme and a 1 million euro loan under the Western Balkans Youth in Business programme. The funding is intended to expand lending to private businesses across Montenegro, including companies outside the capital, Podgorica.

The Women in Business loan is aimed at improving access to finance for women-led MSMEs, while the Youth in Business loan supports enterprises owned or led by entrepreneurs under 35. The European Union backs both facilities through the European Fund for Sustainable Development Plus, providing first-loss risk cover and programme-level technical assistance.

In addition to EU support, Luxembourg and Italy are backing the two targeted programmes through the Central European Initiative. The separate 7 million euro MSME loan is designed to finance investment and expansion by eligible private enterprises, with at least 20 per cent expected to go to green investment such as energy and resource efficiency improvements.

Support adds to Montenegro investment pipeline

Ekaterina Solovova, the EBRD's Head of Montenegro, says smaller businesses remain a key driver of the country's economy through job creation and growth, and that the package is intended to help firms that continue to face funding barriers. Ana Kentera, chief executive of Alter Modus, says the new facility will help the institution reach more businesses and support sustainable business solutions.

Bernard Brunet, Head of Cooperation at the Delegation of the European Union to Montenegro, says support for innovative companies is important for the country's sustainable economic development and its ability to benefit from the EU Single Market after accession. He adds that EU guarantees to the EBRD are meant to help Alter Modus offer financing on competitive terms to clients that might otherwise struggle to access funding.

Alter Modus has worked with the EBRD in Montenegro since 2004, making it one of the bank's longstanding local partners. The EBRD says it has invested 1.1 billion euro in 116 projects in Montenegro to date, spanning sustainable development, infrastructure, private-sector growth and regional integration.

Our earlier article on Pakistan’s push to expand priority-sector lending outlined government-backed targets to raise credit to housing, agriculture and SMEs, alongside measures to speed up approvals and simplify documentation. It also described plans to strengthen banks’ capacity through regulatory reforms, risk-sharing mechanisms and public-private partnerships aimed at easing structural barriers to formal credit.

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