S&T Country Report - Albania - WBC-INCO Net

according to the defined pace of creation and placement of funds. The credit line for
the implementation of the project has been called for on March 31, 2006.
- Funds of the Federal Ministry for Economic Cooperation and Development,
Germany (BMZ)
The BMZ is one of the principal donors in Montenegro and cooperates with the
country since 1999. During this time, the country has received around EUR 53 million
from Germany (EUR 10 million came from Stability Pact funds).
The priority areas of cooperation between Montenegro and Germany are laid down in
government negotiations. Cooperation currently concentrates on enhancing public
infrastructure, supporting the banking sector in setting up programmes for SMEs and
providing advice on economic policy.
At the most recent government negotiations, the following priority areas were agreed
with Montenegro:
- Promotion of public infrastructure;
- Promotion of small and medium-sized enterprises via the banking sector; and
- Provision of advice on economic policy.
Small and medium-sized enterprises (SMEs) play an important role in the creation of
jobs. However, in Montenegro they have so far had hardly any opportunity to finance
their investments through loans. This has severely limited their room for manoeuvre.
The BMZ, together with Switzerland, Austria and the European Agency for
Reconstruction, has developed the European Fund for Southeast Europe (EFSE),
which is active in the entire region. The purpose of the fund is to make small and
micro loans available to SMEs at preferential rates through local partner institutions.
It is a revolving fund, which means that repaid loans are used to grant new loans.
Thus, the fund will stay in existence over the long term and will be able to promote
SMEs until such time as appropriate structures have been established.
Simultaneously, training is being given to bank employees.
As Ljiljana Belada stated in her article focusing on financing SMEs in Montenegro,
the strategic goals and measures for period 2007 - 2010 concerns strengthening of
the financial support to the SMEs’ development. Despite efforts made by financial
institutions and public sector for this gap to be closed, SMEs continue to face
difficulties in providing for finances. Improvement of the access for finances for SMEs
is particularly important to strengthen entrepreneurship, competitiveness, innovation
and growth in economy.
Activities that should be undertaken are:
• Establishment of the Guarantee Fund.
The Guarantee Fund would represent a favourable option for financing, and
would represent significant benefits in terms of easier access to credits, more
favourable lending terms and conditions, reduction of risk of banks for fund
recovery, reduce requirements for mortgages. The Fund would be a support
for financing of the start up of the entrepreneurs and enterprises in the start up
phase as well. The new Law on Banks is currently being developed, which will
regulate the issuing of credit guarantees.
page 11/MNE