A steadfast partner in times of need

When the novel coronavirus reached Bosnia and Herzegovina in March 2020, Mejra Juzbašić Bajgorić, Regional Director for Southeast Europe at Finance in Motion, knew that the challenges ahead would be multifarious.

In addition to the hazard posed by COVID-19, Mejra was also deeply concerned for her community’s economic health. “Small shops and businesses account for a huge proportion of income and employment here in the Western Balkans,” she says. “Retail, accommodation, food services – the micro and small enterprise sector is a major engine of the economy.” And as the region faced a sudden and potentially lengthy shutdown, a lot of businesses would quickly find themselves in a precarious situation.

To help mitigate the damage, local regulators and microfinance lenders had instituted measures such as payment moratoria until the worst was over. New, flexible financing helped keep many entrepreneurs afloat. “This was necessary and laudable,” says Mejra. “Microfinance providers are absolutely key to enabling and empowering micro and small enterprises. They are really working hard for their clients in these times.”

Fortunately, this was just where Mejra and her team were able to take action with the help of the European Fund for Southeast Europe (EFSE): an impact fund advised by Finance in Motion that specializes in channeling funding to entrepreneurs and households through local financial institutions. “We have very deep and long-standing relationships with our investees,” says Mejra. “These are institutions that work with high dedication to expand responsible financing to hardworking business owners. And our partners were not going to face this crisis alone.”

In April, only weeks after the first case of COVID-19 had been diagnosed in the region, and just as the economic ramifications began to intensify, EFSE had already signed the first of a battery of new loans to key microfinance providers across the Western Balkans. The new funding would boost their capacity to support distressed entrepreneurs while fueling the institutions’ ability to continue sustaining livelihoods and business survival for hundreds of thousands of effected people.

Mejra reflects on those first few weeks of the crisis: “It really sent a signal of support at the time. There was so much uncertainty – parameters were changing on a near-daily basis. But this is why Finance in Motion has staff right here in the regions: We can assess the local situation first-hand and the funds we advise can respond with speed and agility. EFSE was able to step in right away with financing packages.”

Between April and July 2020, EFSE had issued over a dozen new loans to its partners across Southeast Europe and the E.U. Eastern Neighbourhood Region, with more on the way. This funding is being used to provide crucial resources to entrepreneurs and the institutions they rely on to combat the economic fallout of the COVID-19 crisis.

EFSE, like the three other impact funds advised by Finance in Motion, was also quick to respond to partners’ nonfinancial needs through its complementary Development Facility. A comprehensive package of technical support measures was released as early as late March, containing consultation services for crisis management, risk identification, and more.

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