A European Union-funded guarantee scheme has mobilised nearly €60 million in concessional loans to support small and medium-sized enterprises (SMEs) in the Western Balkans, aiming to enhance economic resilience, create jobs, and boost competitiveness across the region.
Launched in November 2022, the Western Balkans Guarantee 4 SME Resilience initiative has now unlocked a total of €886 million in loans with favourable lending terms, expected to support around 15,000 businesses and preserve 140,000 jobs. The programme is a key component of the EU’s broader Reform and Growth Facility for the Western Balkans, which aims to accelerate economic convergence with the European Union.
The latest round of agreements was signed this week by the European Investment Fund (EIF), which committed €4.8 million in guarantees to Sparkasse Bank Ad Skopje, Sparkasse Bank BiH, and Erste Bank Podgorica. These guarantees will facilitate a new €60 million loan portfolio to be disbursed by the banks under softer lending conditions.
Croatia’s Erste & Steiermärkische Bank d.d. will manage the coordination of the guarantee portfolio, which is supported under the EU’s Western Balkans Investment Framework. The aim is to channel concessional financing directly to SMEs that often struggle with limited access to credit.
“These guarantees will enable our partner banks to offer loans with lower interest rates, reduced collateral requirements and longer maturities,” said EIF Chief Executive Marjut Falkstedt. “This support will help SMEs in North Macedonia, Bosnia and Herzegovina, and Montenegro to expand, innovate and adapt to market challenges.”
The initiative is expected to unlock €20 million in financing for around 125 businesses in North Macedonia, €25 million for approximately 150 firms in Bosnia and Herzegovina, and €15 million for 100 enterprises in Montenegro. Altogether, the new agreements are expected to help sustain more than 5,750 jobs across the three countries.
European Commissioner for Enlargement, Marta Kos, said the programme exemplifies the EU’s strategic commitment to the region.
“With €4.8 million in EU backing, these guarantees will unlock up to €60 million in affordable financing, directly supporting the objectives of the Reform and Growth Facility,” Kos said. “This is how we help Western Balkan economies grow, create jobs and move closer to their European future.”
The EIF, part of the European Investment Bank (EIB) Group, has now signed guarantee agreements with 18 financial institutions in the region under this facility. The broader objective is to strengthen market integration and support economic transformation through increased access to finance, especially for SMEs, which account for over 99% of businesses and more than 70% of jobs in the Western Balkans.
Christoph Schoefboeck, CEO of Erste & Steiermärkische Bank, said the scheme draws on the bank’s long-standing cooperation with the EIB Group to deliver targeted support to the private sector.
“SMEs are the backbone of our economies,” Schoefboeck said. “By coordinating this programme, we aim to help firms improve their resilience and competitiveness, contributing to more sustainable economic development across the region.”
The European Investment Fund (EIF) is the EU’s specialist provider of risk finance to benefit SMEs across Europe. It supports entrepreneurship, innovation, and employment by enhancing access to finance, often in cooperation with local banks and financial institutions. The EIF also plays a pivotal role in implementing EU priorities such as digitalisation, the green transition, and social inclusion.
In 2024, the EIB Group, which includes the EIF, signed nearly €89 billion in new financing for over 900 projects, nearly 60% of which directly supported climate action. The Group also facilitated a record €100 billion in investments for energy security and €110 billion for startup and scale-up capital across Europe.
All projects financed by the EIB Group align with the Paris Climate Agreement under the institution’s Climate Bank Roadmap. Half of its EU-based funding is directed toward cohesion regions, helping to bridge disparities and promote inclusive growth.