MIGA Supports Small Businesses and Climate Lending in Serbia
WASHINGTON DC, March 3, 2022 — MIGA has issued a guarantee of Euro 216.67 million to Nova Ljubljanska banka d.d., Ljubljana (NLB) to help finance the operations of a recently acquired Serbian subsidiary, Komercijalna Banka AD, Beograd (KB). With MIGA’s support, KB will offer lending to micro, small, and medium enterprises (MSMEs), and promote climate finance.
MIGA’s guarantee provides protection against the risk of expropriation of funds. By law, KB is required to maintain mandatory cash reserves with the Serbian central bank. The guarantee reduces the capital charge of these reserves on NLB consolidated basis to zero, thereby freeing up capital to support lending for MSMEs and climate projects.
“Against the backdrop of the COVID-19 pandemic, our guarantee to NLB will help small and medium enterprises—the engines of the Serbian economy—get easier access to credit,” MIGA Executive Vice President Hiroshi Matano said. “We are also helping to increase climate finance, which will strengthen the country’s ambitions for a green recovery.”
NLB Group is the leading banking and financial group with headquarters and an exclusive strategic interest in Southeast Europe. With the acquisition of KB in December 2020, the Group has further strengthened its strategic and systemic position in the region.
The acquisition also helps NLB broaden support for MSMEs, which are particularly vulnerable to the economic fallout from the COVID-19 pandemic. Despite representing over 99 percent of Serbian businesses and 66 percent of total employment, MSMEs account for only 25 percent of total loans issued in Serbia.
Furthermore, NLB, a sustainability-oriented bank, will use the capital unlocked by the guarantee to scale up its climate finance activities and develop an integrated framework for potential projects.
“NLB Group is no mere financial group. As an institution of systemic importance, we are namely not only interested in strictly business topics and results that contribute to economic development of the region—we also wish to contribute to a higher quality of life of all its people,” emphasizes NLB’s CEO Blaž Brodnjak and added, “NLB Group are namely the people who know and understand the industry in which we work, who develop innovative, customer-oriented products and services, and who are connected to the environment and the region in which we live. For us namely, this region is not just a spot on the map. This is our home.”
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About NLB
NLB Group, headquartered in Ljubljana, is the leading banking and financial group in Slovenia with exclusive strategic focus on selected countries in Southeastern Europe (SEE), our home region. It covers an area with a population of approximately 17 million people. In addition to NLB, a main entity in Slovenia, NLB Group is comprised of seven subsidiary banks in SEE, several companies providing ancillary services (asset management, real estate management, leasing, etc.), and a limited number of non-core subsidiaries in a controlled wind-down. The Group has universal banking model and supports its clients through retail, corporate and investment banking services. On six out of seven markets where NLB Group operates, the market share of member banks exceeds 10% (by total assets).
About MIGA
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over US$65 billion in guarantees across 120 developing countries.
Contacts
In Washington: Vamsee Krishna Kanchi, (202) 458-9771, vkanchi@worldbank.org
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