The European Fund for Southeast Europe (EFSE) said on Tuesday it has provided a senior loan of 30 million euro ($33.6 million) to Erste Bank Montenegro to enhance access to housing finance in the country.
The investment is particularly intended to extend opportunities for borrowers to purchase homes or improve existing living places at affordable conditions, EFSE said in an e-mailed statement.
“With its strong presence on the market, Erste Bank Montenegro has proven a strategic ally for EFSE in our endeavour to promote prosperity in Southeast Europe and the Eastern Neighbourhood Region. The fulfillment of basic needs – such as access to long-term solutions for housing – is a critical step in establishing the conditions for economic growth and creating future prospects,” EFSE board chairman Christoph Tiskens said.
With this new investment, EFSE and Erste Bank Montenegro are continuing the success of a previous collaboration that enabled housing and small business financing to be provided to around 6,600 borrowers, the fund noted.
“We are delighted to continue our cooperation with EFSE, which will provide additional impetus to the dynamic growth of our housing loan portfolio and thus contribute to further strengthening our market position within this segment. This credit line will support numerous families in Montenegro in fulfilling their aspirations and resolving one of the major priorities in life – quality living space – whilst buying or renovating their homes under favourable conditions,” CEO Aleksa Lukic said.
Erste Bank Montenegro is the second largest bank in Montenegro, with an expansive branch network optimally positioned to reach homeowners across the country. The bank’s housing portfolio has almost doubled over the past three years, with about 50% of this portfolio outside the capital of Podgorica. Young and first-time homebuyers represent a significant portion of clients.
EFSE was initiated by German development bank KfW with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission. It aims to foster economic development and prosperity in Albania, Armenia, Azerbaijan, Belarus, Bosnia, Bulgaria, Croatia, Macedonia, Kosovo, Georgia, Moldova, Montenegro, Romania, Serbia, Ukraine and Turkey.