Udruženje mikrokreditnih organizacija u Bosni i Hercegovini
Association of Microfinance Institutions in Bosnia and Herzegovina

Zagrebačka 50/IV

71000 Sarajevo, BiH


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Sarajevo, 27/03/2012 – The analysis of the business operations of the members of the Association of Microfinance Organizations in Bosnia and Herzegovina illustrates that this sector continues to show positive results of the recovery following the crisis that impacted even the most developed financial markets.

Negative trends of the microfinance sector in BiH are starting to change. The market peak happened in 2008 and then it was followed by the downturn, but the efforts were made to save the BiH microfinance industry from failure that included the improvement of the Credit Registry and the creation of the Centre for Financial and Credit Counselling of debtor to improve their finance management. Having in mind the efforts that were undertaken it is encouraging to see that according to MIX indicators (September 30, 2011), MIX MARKET the leading global business and financial information organization, projected that after the negative growth trend in the last quarter, the market will start to grow in the next 12 months in terms of the number of clients and the loan volume. The MIX also projected that portfolio at risk ­> 30 days will remain low or will continue to decrease. At the beginning of the year it was reduced by almost 11%, and after nine months by additional 4.5%. If we take into consideration the reports from September 30, 2011, it seems that the projected growth occurred one quarter earlier. The MFIs are reporting on the continuation of the shrinking of their portfolios, but also on the first national increase in the number of clients in almost three years.

Encouraging trends

The improvement is definitely the result of the efforts made through the application of responsible lending practice, achievement of the mission and objectives of the microcredit sector, as well as improvement of the Central Credit Registry. Majority of the Association’s members finished the 2011 with positive financial results, and the loan loss reserves were reduced by 7.4% compered to the same period of the previous year. Microcredit Organizations are employing around 1800 employees and they are contributing to the revenues of the administrative bodies’ budgets through payment of taxes and contributions to salaries and fees of the employees of MCOs, as well as through taxes and fees paid by the micro-entrepreneurs who have developed their business by using microcredits over a certain period of time.

The strengthening of the financial stability will be continued in the course of 2012, with the aim to create more space for micro-entrepreneurship and agriculture production growth.

Furthermore, the Association of Microfinance Organizations in Bosnia and Herzegovina in partnership with the IFC has launched the campaign on protection of the clients in the microfinance sector.

The campaign that was launched at the beginning of this month will also help the Microcredit Organizations to introduce client protection principles into their business operations and to implement comprehensive training required to meet the standards and principles of client protection. After the training, there will be a certification process for the application of the client protection standards, and this will help the Microfinance Institutions to build strong and long-term relations with clients and thus to reduce their business risks.

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